A Missing Link in Your Spending Plan?

checking a box

Making a spending plan is a key to being on top of your finances. When you look at the income you can realistically expect and then decide in advance how you want to spend it, that plan puts you in control; it helps you ensure your money is used where it matters most.

But is a spending plan all you need? The answer is a definite NO. Lots of people make spending plans but still don’t gain control. Why?  Because even the best spending plan is useless if you don’t FOLLOW it. And that doesn’t happen automatically. You need a strategy.

The good news is that for most people, part of their spending plan is easy to follow; fixed expenses like rent and other bills are predictable, and are usually paid just once a month. The tricky part for most people is staying within their planned limits for flexible expenses (groceries, fun, etc).

It comes down to questions like this:
If you plan to spend $320 on groceries for the month, how do you make sure you don’t spend more than that?

The answer? Keeping track. The only way to make sure you follow through with your plan is to have a strategy for checking up on your spending throughout the month. There are “old-fashioned” ways to do that, like writing down spending in each category, using either written ledger charts OR computerized spreadsheets. The “envelope method” also can help you follow your plan; it involves separate envelopes containing cash for each category of spending you wish to monitor (groceries, gas, fun, etc).

There are also “apps” that can help you track. These apps work in a variety of ways: with some, you enter your spending in your mobile device as you go along; with others, your debit card spending is linked to the app, so that, for example, all purchases at the grocery store are automatically added to your running total of food expenses.

The money management apps for mobile devices are generally provided by commercial organizations, and Extension does not recommend commercial products, but consumers have found many of these apps useful. One caution I suggest, however, relates to internet security when accessing your financial accounts. Choose settings within the app that will prevent the app from connecting to your bank account via open public wi-fi.

Tracking your spending, especially in the categories where you are most at-risk of exceeding your planned amounts, is the best step you can take to make your spending plan work. And that is the way to achieve your financial goals!

For more information, find our free 4-page publication “Tracking Your Spending.”

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

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Lifestyle Transitions Happen

It may be divorce, retirement, job loss, care-giving responsibilities, marriage, chronic or acute illness, disability, or death – or something else.  Such events can turn your life upside down, creating stress and dramatic changes in your routines.  Even positive transitions (such as marriage or the birth of a child) create stress and demand change.

With all the stresses that you encounter, you need to make sound financial decisions, because these decisions will impact your financial health now and  in the future.

Four steps to explore to be in control of your money are:

  • Know what you have and know what you want. It is important to assess your situation’s needs and wants, and to take advantage of all available resources.
  • Set up your spending plan.  A spending plan is a tool for telling your money where to go.  Plan your spending by categories, and write down your spending plan. To decide how much to plan for each category, you will need to look at your spending in the past.  Some people can look at the past month, while others will need more than one month’s information to develop their spending plan. Review your spending for each pay period of the last month – the last 4 weeks,if you are paid weekly, or the last two paychecks if you are paid bi-weekly.
  • Stay with your plan.  Following your plan lets you get the results you want.
  • To make your plan work for you, you will need to revise and improve it. It may take a couple of months to get the plan exactly like you want. Remember – you can change your plan.  As your situation changes or your family’s needs and wants change, it is logical that your spending plan should change.  Revisit your plan annually (or more often).

As your situation changes, the basic process stays the same:  Know what you have and what you want; Make a plan; Follow the plan; Review and revise for the future.


Susan Taylor

Resources are important whether you are looking to rent your first apartment, pay your bills, buy your first home or send your child to college. There are many ways to save money to reach your goals, and hopefully ISU Money Tip$ will be one of them. I enjoy traveling, needlework and am a novice gardener.

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