Create a Spending Plan

Following is a sample spending plan:

Income $4100.00

Total Credits: $4,100.00

Note that the first thing on the spending plan is the amount of income you have coming in. You must portion this out to cover all of your bills or you will end up going into debt.

The next thing you want to do is to list all of your expenses. It helps to do this by category.



Living expenses includes the things you need to pay for day to day. Notice that except for school lunch money, food is not included in this part of your spending plan. You spend a large percentage of your income on food, so make it a separate category.

Car Insurance 62.13

Car Maintenance 5.40

Cell Phone $59.22

Clothing $50.00

You may not spend all the money for clothes each month, but what you don't spend this month in any category, you can carry over to the next month. Remember you got the $50 clothing budget amount by averaging out six months or a year of spending history. You may need $200 for clothes the month your child goes back to school, so by carrying the unspent amount over from month to month, you will end up with what you need when you need it.

Dental $15.00

The same is true for the money set aside for dental expenses. You probably don't go to the dentist every month, but by setting aside money in your spending plan for dental each month, you will be able to pay for that exam or filling when you do go.

Diapers & Wipes $25.00

Fuel $215.00

Health Insurance $350.00

Health Insurance looks like a big bill, especially if you have to pay your own. Be sure to include this, though, even if you are young and in good health. What appears to be a normal pregnancy can end up being a life-threating emergency with weeks spent in the hospital. A routine checkup can uncover an unknown cancer or other health problem. A car accident can put you in the hospital. Prepare yourself with adequate insurance. Include it in your spending plan.

Household/Personal Supplies $30.00

This is for all those little things that you need every month like toilet paper, napkins, hand soap, laundry detergent and so forth.

Internet/Phone $60.00

Kids' Lunch Money $12.95

Life Insurance $41.50

Tearm life insurance is another thing no family should be without. If you are a single, it will give your parents the money they will need to pay off your bills and funeral expenses. If you are married it gives your spouse and children the money they need to carry on without your income. Younger people are generally in better health than older people. The healthier and younger you are when you take out life insurance the cheaper it is. See the insurance page for more details.

Propane $110.00

Rent $850.00

Stamps $8.80

Utilities $200.00

Total Living Expenses: $2,095.00

Church and Charitable Donations

It seems an odd thing that if you give away part of your money each month you come out ahead, but that has been my experience. We tithe 10% of our income and live on 90%. Take the tithing out of your check as soon as you get it and get used to living on 90%. If you wait until your money is nearly spent, it seems much harder to give away that 10%.

Tithing $410.00

Food Bank and other charities $25.00

Total Donations: $435.00

Miscellaneous Expenses

Every month little expenses pop up and surprise us, but the better your spending plan, the less you will be surprised. Your miscellaneous expenses will be different than these, but here are some examples that fit into this group:

Birthday/Gifts $10.00

Date Money $25.00

Field Trips $0.00

Schools seem to plan a lot of "educational experiences" that cost kids and parents a lot of money, so be prepared and save up for them, unless you are willing to tell the school, "My child is not going to the concert/museum/fire station."

Sports/Fees $0.00

Spouse Fun Money $10.00

Spouse Fun Money $10.00

Even on the tightest budget be sure to include some "fun money" for each adult in your spending plan. All of us have little luxury things we want to buy, gifts we want to save for, or maybe we just go out to lunch with our co-workers once a month. If you give your kids an allowance, include that as well.

Total Miscellaneous Expenses $55.00


One of the easiest items to adjust and cut money from in your spending plan is the food budget. But be careful here. If you find you spend a lot on food, analyze your menus and eating habits. If you find you eat out a lot, or purchase a lot of ready-to-eat foods from the freezer section of the grocery store you will spend more than if you cook basic meals from scratch. If you have teenagers in the house you know you will be spending more than if you are a single or a couple alone or with small children who don't eat a lot. Don't cut down what you are spending for food unless you are willing to change your cooking and eating habits. If you are married, make sure the one who does the cooking approves the food budget.

Total Food $240.00


If you want to stay out of debt be sure you include savings in your budget. Savings can be long-term such as for retirement, or short term such as saving for a vacation or an article of furniture.

Retirement $775.00

Don't think that you don't have to save for retirement, unless you are independently wealthy. Putting a little each month into a ROTH IRA, or other investment account can give you peace of mind, knowing that when your retirement will be a time of comfort and not crisis.

July Vacation Savings $100.00

Saving for special things like your summer vacation makes it possible for you to stay away from using your credit card and keeps you out of debt.

Emergency fund $100.00

Be sure to build up an emergency fund to pay for those unexpected expenses that are so easy to put on credit when you don't have the money. You might want to set up a separate savings account for this. Ideally you should aim to have 6 months of expenses in your emergency fund. For the people in our example, that means they should build up a fund to equal $24,600.00. Give yourself time to get to that level.

Dave Ramsey suggests starting with an emergency fund of $1000.00. In this example, you can get that much in less than a year. You might, however, want to put off putting money in the Kid's College Fund until you have $1000.00 in your emergency fund. If you took the $100.00 Emergency Fund budget, the 300.00 from your Kids' College Fund and $100.00 from your retirement savings, you could have $1000.00 in an Emergency Fund in just two months. Then on the third month go back to saving only $100.00 for emergencies, and go back to putting 300.00 in savings for kids' college, and add back the 100.00 to your retirement fund.

When the Emergency Fund reaches your goal amount (here it is $24,600), then you can use that $100.00 for something else.

Kids' College Fund $300.00

Total monthly savings $1275.00

Total for pre-budgeted items $4,100.00

The total for pre-budged items in your spending plan should equal your income for the month. Remember you are budgeting in savings for various items so your bank account won't be down to zero, but your planned outgo and income will equal each other.

Money Left to Spend $0.00

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