Now that you\’ve committed to building a plan to spend, what\’s the next step? Often people don\’t even begin this process because they don\’t know where to start. That\’s okay: you\’re not alone in this. It\’s just a matter of figuring out, \”where do I go from here?\” I always encourage people to utilize free tools until they see a necessity to get a subscription and help them build this plan to spend. So check out these resources, figure out which one works for you, and go ahead and adopt one of the following for your personal use.
Find some budgeting software first, preferably one that allows you to break down your income and expenses. (Note: I don\’t receive any sponsorship for mentioning these products—I just find them to be helpful.) My favorites are everydollar.com or mint.com. They\’re free, at least at the basic level, and can help you establish your Plan to Spend monthly.
I started out using Mint but then transitioned over to EveryDollar because I follow a zero-based budgeting approach. That means that every dollar has an assignment, and EveryDollar is actually structured so that every dollar has a purpose—it\’s not just a slush fund. That\’s what works best for me, but you may have a different methodology that works better for you.
I couple this with a wealth monitoring tool that helps me monitor my net worth called Personal Capital. (You can also use the budgeting side of Personal Capital, but I\’ve only ever used these tools independently.) I recommend that you find a similar program that helps you track your net worth, assets, liabilities, and so on.
Some of you may be nervous about having your financial information saved on various platforms. Therefore, you may opt to build and use a spreadsheet of some kind. If you\’re a spreadsheet wiz, have at it, but I would also recommend that you avoid recreating the wheel—don\’t add complexity where complexity is unnecessary! That complexity often prevents people from managing a budget in the first place. It isn\’t easy to start, build, and maintain. Why not make that process as simplistic as possible?
Once you open your new account, review the last 90 days of your bank statements and your credit card statements to analyze where you spent your money. A word of caution here: if you do have a spouse or anyone else who has access to your accounts, this analysis can cause some level of friction and some challenges in your relational harmony. You\’re reviewing some information that you may not be accustomed to looking at. As a result, you may realize that you didn\’t know that a certain amount of money was regularly being spent at a particular retailer or that a coffee habit is a little bit more than a habit. Do your best to be objective and just be aware of these things. Think to yourself, \”Okay, well, the past is in the past,\” and leave it at that. Now, how are you going to change your behaviors so that you can align those actions with your ultimate goal for the lifestyle you want to lead?
My call to action is to sign up for one of the products mentioned above or any other budgeting software that will help you get started. Sign up for a program that enables you to build your Plan to Spend, manage, and monitor where money is going. Most people aren\’t doing this at all, and if they are, they\’re not always doing it as effectively as possible. So get ahead of the curve! Adopt a Plan to Spend so that you can accomplish the goals and the lifestyle you want to lead.
