5 Steps to Spending Smart

Via LearnVest By SavvySugar ~

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Straightforward budgets aren’t always the best solution for people trying to get a handle on their money—the inflexible nature of budgeting can be a frustrating turn-off. But just because you’re not one for budgets doesn’t mean there isn’t hope for following a plan that will get your finances on track.

A spending plan is a better solution than a traditional budget for those who want a less rigid method for managing their money. Give your dollars some direction and take control by taking these five simple steps for creating a spending plan.

1. Calculate

Determine your discretionary income with a quick calculation: Take your monthly income after taxes and subtract your fixed expenses like rent, insurance, and bills. The money left over is your discretionary income.

2. Think Ahead

Look in to the near future and pick out any expenses on the horizon like vacations, gifts, appliance replacements, etc.

3. Save

Set aside a certain amount of your discretionary income for savings and for the things you identified as future expenses. The beauty of a spending plan is that it is flexible—you can always increase the amount of personal savings you set aside if one of the projected expenses falls through (like if you needed a new microwave, but your sister gave you her old one).

4. Make a List

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