So I was into budgeting like 3 years ago. It was the start of our debt payoff days and the beginning of my major anxiety around money. Well, maybe not the beginning, but my anxiety around trying to keep money rather than my anxiety around never having any. Which is precisely why I want to share with you my new favorite: spending plans. What is a spending plan and why is it taking over the budgeting world? Well, lemme tell ya…
What is a budget?
A budget, as some would say, is telling your money where to go. Which is exactly what it is.
It’s taking all of your money, saving some, paying your bills, and deciding exactly where you want all of your money to go. Check out our 5 accounts automated budget system.
As simple as it may sound, still the word, “budget” tends to send fear into the hearts of people who hear it. They imagine restrictions, limitations, and ultimately having their money taken away from them. It can often make people instantly put up a guard and think, “I can’t do something like that.“
If you are turned off by the idea of budgeting, or you have tried different financial plans and nothing seems to be sticking, take a moment to consider that maybe everything you’ve tried was perfectly designed…for someone else!
This is something I talk about a lot in my Money-Free Mind training. The hard truth that a lot of financial plans or money gurus are all preaching one way of making money work.
Does their way work? For sure! That’s why they share it! Does it work for everyone? No! If it did we could all easily implement their steps, stop struggling, and enjoy our 6 figure retirement fund. Since this isn’t the case, why not consider budget tweaks like a spending plan?
What is a spending plan?
Ok, so what makes a spending plan so different from a budget? Some people might tell you there really is no difference between a spending plan and a budget, but I would beg to differ.
What the major difference really is between budgets and spending plans is a mind flip. Mind flips are one of the most overlooked maneuvers in the entire universe. Especially when it comes to money. Just a simple change in perception can help you manage and manifest money effortlessly.
The moment I decided to stop looking at my money as numbers on a budgeting spreadsheet and started applying it as a spending plan for my life was the same moment that I was finally able to start really gaining traction toward financial freedom.
So what’s the difference?
Instead of following the rules of budgeting by saving, paying my bills, and then squeezing out whatever is left, a spending plan allows you to start spending more money on that extravagant life of your dreams while still meeting your financial goals!
I called this sneaky little plan, The Bucket List Budget.
This is how The Bucket List Budget works:
- Narrow down your biggest life goals
- Eliminate time and money blocks that are holding you back
- Create a new plan, with more money so you can do more of what you want! How we budget hacked $3,000 per month
Ultimately a spending plan makes your spending more about you than it does about your money. I think this works so well because whenever we put our focus and attention on money, it has a way of taking our power away.
Why people are choosing spending plans over budgeting
People who have tried and felt restricted or limited by budgeting are slowly beginning to shift their focus to more of a spending plan type strategy for their money.
The beauty in creating a well-planned spending plan is that you are still able to provide for your basic needs, save for the future, and have fun in your life right now without feeling like you have to sacrifice or live with the guilt of spending.
Spending plans and credit card debt
Here’s the catch. Some people might read all of this and think, “Sweet! This chick is giving me permission to just spend all my money on me!!” No, not quite…that kind of thinking is what leads to credit card debt.
Credit card debt leads to you paying hundreds to thousands of dollars to credit card companies every month. What people often mistake for freedom with a credit card is often shackles and chains in disguise. When you are creating a spending plan, it is so important to start by looking at the income that you already have. How to Save for the Future and Still Live That YOLO Life
How to know which one is right for you?
So are you more of a budget person or a spending plan type person? Here are some signs to help you tell.
- Are good with numbers
- Love doing calculations
- Already live pretty frugally
- Tend to be more left-brained thinkers
- More free spirits (enneagram 4, 5, 7)
- Don’t want to spend time calculating
- Have big dreams or travel plans
- Tend to be the more creative type/hands-on learners
If you find yourself checking off all of the boxes under “Spending Planners” then it might be time for a Budget Tweak!
How do I get started with a spending plan?
The best way to get started with a spending plan is by doing a spending inventory. This means just taking a look at what you normally spend each month and then building a spending plan based on those numbers.
I walk you through this process in The Bucket List Budget, but you can start by following these few simple steps:
- Take inventory of where you spent your money last month
- Decide which areas of your spending you’d like to reduce or eliminate
- Make a new budget plan based on those numbers
What if I have no money to spend?
Here is a big concern. If you are truly stuck in that paycheck to paycheck cycle, I recommend reading about our downsize. For years our family lived way above our means, just trying to keep up with the Joneses.
The day we decided to take control of our lives was the day we finally started to get our life and finances back in control. It can be a scary thing, but it is definitely worth it.
Here are some more posts to help you out:
- 40 Ways to Reduce Your Monthly Budget
- 10 Ways to Reduce Your Phone Bill
- Create a Co-op to Save Money and Sanity