Our Guide to Creating a Spending and Savings Plan

3/22/2021

Learning how to manage your spending is an important life skill. During March’s financial literacy seminar with the Springfield Housing Authority (SHA), Mike Crews helped participants put together information about their income and expenses to develop a spending and savings plan. While brainstorming ways to increase income and decrease expenses is simple, putting those plans into action can be challenging.

“There are many ways to organize finances, but achieving financial security can still be difficult,” says Crews. “There’s always a new method promising to make you a millionaire overnight, but sticking to the basics is the true key in building and maintaining wealth.”

Before starting a spending and savings plan, it will help to understand the factors involved. Learn about common terminology and understanding the basics of your income and expenses here.

Organizing Your Spending and Savings Plan

Mike suggests creating a spending and savings plan using a chart from the FDIC. “This type of plan allows for a comprehensive look at your finances. In a spending and savings Plan, all expenses and net income are organized in a fashion that enables adjustments to a budget.”

The FDIC spending and savings plan has three sections to it: Net Income, Expenses, and Comparison of Net Income and Expenses.

Net Income

Under the Net Income section, create three columns. Label column one as ‘items’, column two as ‘past monthly amount’, and column three as ‘planned monthly amount.’

Under the ‘items’ column, list all sources of income. This includes paychecks, cash jobs, public benefits, interest, dividends, and more. In the ‘past monthly amount’ column, list how much you earned from each source of income in the past month. In the ‘planned monthly amount’ column, list how much you expect to make from each source of income in the next month. Then, add up the columns. This helps you keep track of all sources of income in one place and see how much you make altogether.

My Net Income

Item	Past Monthly Amount	Planned Monthly Amount for _______ (Month)
Net (Take-Home) Pay Job 1
Net (Take-Home) Pay Job 2
Net (Take-Home) Pay Job 3
Net Self-Employment Income
Public Benefit 1:
Public Benefit 2:
Public Benefit 3:
Public Benefit 4:
Interest
Dividends
Child Support
Alimony
Gifts
Other:
Other:
Other:
My Total Net Income (Add up rows above)

Expenses

The Expenses part of the plan will be set up in the same way as the Net Income section. Create three columns and label them ‘items’, ‘past monthly amount’, and ‘planned monthly amount.’

Under the ‘items’ column, list all of your expenses. Be sure to include what you spend for pleasure, like food and entertainment. As the image below shows, it may help to organize your expenses by category. In the ‘past monthly amount’ column, list how much you spent per item in the last month. In the ‘planned monthly amount’ column, put how much you plan to spend per item in the next month. Once all the totals are listed, add up the columns to see your overall spending total.

My Expenses

Item	Past Monthly Amount	Planned Monthly Amount for _______ (Month)
My Saving
Saving Toward: Emergency Fund
Saving Toward:
Saving Toward:
My Sharing
Sharing with Family and Friends
Charitable Contributions
Other:
Other:
My Spending
Rent / Mortgage Payment
Property Taxes / Insurance
Water
Electric
Gas / Oil
Trash Collection
Telephone (Cell and Land-Line)
Internet
Cable / Satellite / TV Viewing Services
Car / Truck Payment
Car / Truck Insurance
Car / Truck Maintenance and Repair
Car / Truck Fuel
Public Transportation
Health Insurance (portion not covered by employer or taken out of gross pay)
Other Healthcare Expenses
Student Loan Payments
Credit Card Debt Payments
Other Debt Payments
Personal Care Attendant
Eldercare
Childcare / Child Support Payments
Groceries and Household Supplies
Eating Out or Take-Out
Service Animal Expenses
Pet Care
Personal Expenses
Entertainment
Other:
Other:
Other:
My Total Expenses (add up rows above)

Comparing Your Net Income and Expenses

Finally, compare your total income to your total expenses. Subtract your total expenses from your total income to see the difference. How much is left?

If you don’t like what you see, take another look at your expenses to see what can be budgeted.

“When adjusting a budget, it's important to remember that not all cuts are equal,” says Crews. “It's essential to know what cuts will benefit your life and what adjustments can jeopardize your financial security. An example of a positive adjustment would be spending less money on cable or streaming services by switching to a different plan or canceling it altogether and then using that money to pay down debt instead. An example of a harmful cut would be not paying a utility bill. Being able to make responsible adjustments is when the magic happens.”

Comparison of My Total Net Income and My Total Expenses

Item	Amount
My Total Net Income (from last row of the My Net Income section in the Planned Monthly Amount column)
My Total Expenses for __________ Month (from last row of the My Expenses section in the Planned Monthly Amount column)
Difference (My Total Net Income minus My Total Expenses)

Table for Calculating Monthly Amounts

Frequency: How often you receive the income or pay the expense	Do this first then enter into the plan
Annual (once per year)	Divide by 12
Semi-annual (twice per year)	Divide by 6
Quarterly (four times per year)	Divide by 3
Monthly (once per month)	Use as-is
Bimonthly (twice per month)	Multiply by 2
Biweekly(every two weeks)	Multiply by 26 and then divide by 12
Weekly (every week)	Multiply by 52 and then divide by 12

Keep Up With Our Financial Literacy Seminars

To keep up with topics covered in our financial literacy seminars with the SHA, check out our blog! Not sure where to start building your financial future? Visit us at one of our 12 conveniently located branches to speak with a banker about building a financial plan that’s right for you.