1. Spending Plans
Advanced Level

2. Where’s My Dough?
Divide your play dough to show how much is spent on each expense
How much do you spend on each expense?
What expenses do you have?
Play dough = income
Based upon your current spending, is it realistic to achieve your goal?
You have begun to develop a spending plan!
Adjust your play dough to reach your goal
Write a personal financial goal

3. What is a Spending Plan? A budget
Spending Plan for:
Time Period:
Planned Amount
Actual Amount
Income
Earned Income
Wages or salary before deductions
Unearned Income
Money from savings and investments to help pay expenses during this time period
Received Income from Government Programs
Total Income $
Expenses
Deductions Often Taken from Paychecks
Contributions to retirement programs (401k, 403b, pension, IRA)
Federal income tax and state income tax
Social Security and Medicare
Saving and Investing (Pay Yourself First)
Contribution to savings and investments
Insurance Premiums
Health, automobile, home or renters, life
Housing Costs
Transportation Costs
Food Costs
Family Member Care
Communication and Computers
Telephone landline, cell phone, Internet, cable/satellite television
Medical Costs Not Covered by Insurance
Clothing and Personal Care
Educational Expenses
Pet Care
Entertainment
Gifts and Charitable Contributions
Credit Costs
Student loan, credit card, other loan payments
Total Expenses
Net Gain or Net Loss (Income less Expenses)
An income and expense statement sometimes referred to as a budget which records both planned and actual income and expenses over a period of time
A budget

4. Why is a Spending Plan an important part of financial planning?
Help manage your money in a positive manner
Analyze the opportunity costs of your trade-offs to maximize financial well-being
Increase net worth
Helps set and reach goals

5. Money Management Tools
Statement of Financial Position
Income & Expense Statement
Spending Plan
What is my financial position today?
How have I managed my
money in the past?
What is my future money management plan?
Determine what changes to make
Make changes

6. A forward-looking Income and Expense Statement
May use the same template for both the Income and Expense Statement and the Spending Plan 

7. Spending Plan Development Process
Step 5 - Evaluate and Make Adjustments
Step 1 - Track Current Income and Expense
Develop the spending plan
Maintain the spending plan
Step 4 - Implement and Control
Step 2 - Personalize Your Spending Plan
Step 3 - Allocate Money to Each Category

8. Track Current Income and Expenses
Step 5 - Evaluate and Make Adjustments
Step 1 - Track Current Income and Expense
Completed by developing an Income and Expense Statement
Step 4 - Implement and Control
Step 2 - Personalize Your Spending Plan
Ensures spending plan is realistic
Step 3 - Allocate Money to Each Category

9. Personalize Your Spending Plan
Step 5 - Evaluate and Make Adjustments
Step 1 - Track Current Income and Expense
How will you develop a spending plan?
What is the intended time period for your spending plan?
Step 4 - Implement and Control
Step 2 - Personalize Your Spending Plan
Step 3 - Allocate Money to Each Category
What categories will your spending plan include?

10. How will you develop a spending plan?
Any written method that works for you
Paper and pencil
Spreadsheet
How would you develop a spending plan?
Money management computer software
Applications

11. What time period would you choose for your spending plan?
What is the intended time period for your spending plan?
What categories will your spending plan include?
Usually concurrent with pay period
Reference tracking from the Income and Expense Statement
Do any categories need added, changed, or removed?
What time period would you choose for your spending plan?

12. Allocate Money to Each Category
Step 5 - Evaluate and Make Adjustments
Step 1 - Track Current Income and Expense
Reference tracking from Step One
Step 4 - Implement and Control
Step 2 - Personalize Your Spending Plan
Determine what changes to make
Step 3 - Allocate Money to Each Category

13. When allocating money consider:
Trade-offs and opportunity costs
Contractual expenses
Goals
Contractual
Non-contractual
Required to pay expense for a specific amount of time - not easy to reduce or eliminate
Easy to reduce or eliminate
Rent, Internet, Cell phone
Food, entertainment

14. What variables may cause these percentages to be different?
Spending Plan Guide
What variables may cause these percentages to be different?

15. Net Gain or Net Loss? Net Gain? Net Loss?
Income
Expenses
Net Gain or Net Loss
Net Gain?
Net Loss?
Add more money to savings or another expense
Increase income
Decrease expenses
Both

16. Step 4 - Implement and Control
Make your planned spending decisions
Step 5 - Evaluate and Make Adjustments
Step 1 - Track Current Income and Expense
Step 4 - Implement and Control
Step 2 - Personalize Your Spending Plan
Use a control system to stay on track
Step 3 - Allocate Money to Each Category

17. Which control system would help you stick to your spending plan?
Control Systems
Which control system would help you stick to your spending plan?
Money management computer software
Internet-based spending plan program
Depository institution programs
Check register system
Envelope system

18. Evaluate and Make Adjustments
How well did your spending plan work?
Step 5 - Evaluate and Make Adjustments
Step 1 - Track Current Income and Expense
Is your spending plan helping you reach goals?
Step 4 - Implement and Control
Step 2 - Personalize Your Spending Plan
Do you need to make any adjustments?
Step 3 - Allocate Money to Each Category

19. Summary A spending plan is an important financial planning tool
Step 5 - Evaluate and Make Adjustments
Step 1 - Track Current Income and Expense
A spending plan is an important financial planning tool
Helps achieve goals
Make your spending plan work for you
Make sure to control, evaluate, and adjust your spending plan
Step 4 - Implement and Control
Step 2 - Personalize Your Spending Plan
Step 3 - Allocate Money to Each Category