A spending plan is a tool that tells your money where to go each month. Using a spending plan puts you in control of your finances because you get to choose where to spend your money. That’s some powerful shit.
Financial Game Changers
Here are the 4 game changers that help me stick to my spending plan
- Values-Based Spending
- Emergency Fund
- Sinking Fund
- Future Me
Values-Based Spending
Adding expense categories for the things I value and are aligned with my dream life. This includes financial independence, going on debt-free vacations, spending time with family and friends, and getting regular mani/pedis.
So what does that look like in my spending plan? I invest for retirement through my company’s 401K and have an investing category for my Roth IRA. I have categories in my spending plan for a vacation sinking fund, eating out, and self-care. Once that money is set aside, I have the green light to go out to dinner or schedule a mani/pedi guilt-free. There’s no little voice in my head making me second-guess my spending because it’s in the plan!
When you’re paying off debt and the end is nowhere in sight, being able to get your eyebrows done or schedule a massage can help you stay motivated. Let me tell you something about me, when my eyebrows are done right, you can’t tell me nothing! My whole mood changes.
Emergency Fund
The peace of mind you get from setting aside money for when life happens (and trust me, it’s gonna happen) is priceless. Unplanned expenses can look like having to replace your car tires, an emergency room visit, or having to get a brand new air conditioning (HVAC) unit for the house you just bought. That last one actually happened to me on the second day after moving into my new home.
An emergency fund helps you stay out of debt. If you can cover those unexpected expenses, you won’t need to swipe your credit card or borrow money from family or friends. Most importantly, the emergency becomes an inconvenience that you need to pay for without the added headache of figuring out how you’ll pay for it.
Sinking Funds
I absolutely loooove sinking funds. While an emergency fund helps you pay for unplanned expenses, sinking funds help you pay for planned ones. If you’re planning a vacation in six months that’s going to cost $1200, divide the $1200 by 6 and you know you need to add a vacation category to your plan for $200 a month.
$200 a month has a much better ring to it than dishing out $1200 at once. A virtual show of hands for anyone that has ever charged a vacation on a credit card and ended up still paying for it 6 months later because interest rates and minimum payments are not your friends. That would be me, I’m raising both hands.
Future Me
Future Me is my new BFF. She is my why and keeps me motivated. I am responsible for her, the decisions I make today will impact the life she’s going to have so I better stick to this plan and invest for retirement or else she’s going to be PISSED!
I know the lifestyle that I want to have in retirement so I set aside money from every paycheck to make sure that Future Me is taken care of. I automate my investing, so I don’t even need to think about it. In personal finance, simpler is better. If it’s automated and I don’t have to think about it, it will get done.
The Sweet Spot
Finding the sweet spot between spending money on your needs and making room in your plan for your goals and the things that bring you joy is the ultimate alignment. Striking this balance eliminates the feeling of being in a state of deprivation because you’re enjoying your life right now AND setting aside money for Future You.
Your Turn
You’re not going to slip, fall, and land on your goals. You’re gonna need a plan.
Want to start spending your money on the things that truly matter to you? Get my Free Aligned Spending Plan and start matching your spending to your goals.
What do you include in your budget that helps keep you sane? Share in the comments.
