2014 Resolution: Create a Spending Plan

We’re approaching the time of year where the holiday cheer will slowly diminish and the new year will ring in and give you a confidence to tackle anything. But soon after, your holiday spending will be looming over you and you’ll be left scrambling to make payments. Don’t worry, we’ve got a New Years’ Resolution for you… create a spending plan.

Counting income on calculator

When initially creating a spending plan, it may be hard to find a place to start, but trust us, it’s a resolution that will payoff in the future. We’re going to walk you through the simple steps of how to start allocating your money and working towards a secure financial future.

Step 1Decipher your monthly household income.

This includes any steady money that you are receiving each month, including: salary, pension, and a spouse’s income, if you’re married.

Step 2List out your monthly expenses.

There are two types of expenses to be aware of: fixed and flexible. Fixed expenses are debts that do not change from month-to-month (e.g. mortgage, rent, credit card payments, student loans, etc.). Flexible expenses can vary between months (e.g. groceries, entertainments, gifts, etc.), but are an important part of your budget.

Step 3Do the math!

Add up your income and expenses. Then, subtract your total expenses from your total income. If you get a positive result, then keep doing what you’re doing! However, if your result is negative, then make adjustments to your flexible income.

The most important aspect of creating a spending plan to remember is that it takes time. Like any resolution made at the beginning of a new year, stick with it and make it a routine.

If you have any questions or would like help with setting up, or managing, your spending plan, contact us!



Kara Vincent
Kara Vincent

Kara Vincent is the Financial Officer at Lancaster Red Rose Credit Union.