University of Florida

Creating a Spending Plan

It’s important to make financial goals and learn how to manage money. Good financial management allows you to pay your bills, save, and make purchases without creating debt you can’t handle. Develop a spending plan that fits your individual circumstances and goals with the following steps:

  1. Determine your financial goals by thinking about what you want to achieve financially now and in the future.
  2. Know where your money is going; consider your monthly expenses and the items you buy. You need to know how you’re spending money to make a spending plan.
  3. Calculate your total net income, which is the amount you take home after deductions from your wages or paycheck. This is the amount you control to make purchases and contribute to your savings.
  4. Figure out your fixed and flexible expenses. Fixed expenses refer to expenses you pay for on a regular basis (rent, loan payments, etc.), while flexible expenses are those that vary each month (groceries, car repair, etc.).
  5. Determine whether you’re living on what you make or if you’re spending more than you make. If you find that you’re spending more than you make, evaluate your flexible expenses to see where you can reduce spending.
  6. Stick to your plan. However, you can modify your plan whenever your financial situation changes. For example, if you reduce your spending, then you’ll want to make note of that in your expenses.  

A spending plan can be a great tool to help you achieve your financial goals. For more information on money management, contact your local UF/IFAS Extension office.

Excerpted and adapted from:

N. I. Torres, J. Turner, and B. C. Williams, “Building a Spending Plan: All Six Steps” (FCS7173), UF/IFAS Department of Family, Youth and Community Sciences (rev. 07/2012).


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