How To Develop a Monthly Spending Plan

Black woman paying bills online
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Create a monthly spending plan, and make budget shortages a thing of the past.

Difficulty: Average

Time Required: 1 hour

Here's How:

  1. Total your earnings.
    Calculate how much money you expect to make this month after taxes (only include income sources that you know you can depend on).

    Earnings: ______________________


  2. Assess your monthly expenses.
    Make a list of all of your regular monthly expenses, including any money that you spend on fun things like eating out, entertainment or hobbies and any minimum payments that you have to make towards your debts. You can use a Build-a-Budget worksheet to make this step easier.

    Monthly Expenses: _______________


  1. Subtract monthly expenses from earnings.
    The resulting figure is how much you can expect to have left after covering all of your regular monthly expenses.

    Remaining Money: _______________


  2. Subtract any extra expenses.
    Review your plans for the upcoming month, and make a note of any extra expenses that you are likely to incur. This includes, but is not limited to, scheduled car or home repairs, medical or dental bills, gifts, trips, parties, extra meals out, subscription renewals and holiday-related purchases. Subtract your extra expenses from the figure that you arrived at in Step 3.

    Remaining Money: _______________


  3. Build in a cushion.
    Look at how much money you expect to have left after covering all of your anticipated expenses, and decide if what remains is enough cushion against unexpected expenses (car or home repairs, medical bills, missed work time, etc.) If you’re not sure how much extra to build in, 10-percent is a good rule-of-thumb.

    Cushion: ______________________


  1. Rework your budget.
    If your budget comes out on the negative side, go over your monthly expenses again, and look for places to make cuts. Keep at it until your budget works.


  2. Invest in yourself.
    Use any remaining cash to pay down debts or to build up your savings and investments.

    Money to Invest: ___________________



    1. To allow for adequate planning time, make your spending plan before the start of the month.
    2. Don’t be afraid to change your spending plan, if your circumstances change.
    3. No two months are exactly alike, so make a new spending plan each month.