family budgeting

Here’s How to Create a Proactive Spending Plan that Helps You Save

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Budgets more often than not fail. A simple yet effective alternative to the traditional budget is a proactive spending plan that helps you save.

spending plan

It’s no secret that I’m a fan of making a budget. I’ve been keeping a budget now since 2006.

But here’s a hard truth that even I admit to…

Budgets rarely work.

The problem with budgets is that they are all about good intentions.

Good intentions give you nice warm and fluffy feelings, but they don’t give you actual results.

A budget (and tracking your expenses) will show you where you are overspending. But it won’t stop you from overspending in the first place.

And budgets aren’t much fun either.

Which is probably why only about 30% of people actually have a budget.

And no wonder when you read articles on how to create a budget and they start like this:

“Budgets are a necessary evil” [source] “Creating [a budget] can be extremely overwhelming”   [source]

Today I’m going to share with you an easier, smarter alternative to the traditional budget that we’ve been using for the last couple of years.

Rather than creating a budget for the year and hoping that you stick to it, this simple budgeting method is a proactive and automated weekly or fortnightly plan for your money.

No tracking expenses and no nasty surprises at the end of the month when you compare your actual spending to what you have budgeted.

Instead, you allocate your money for the week and you automate most of it, spending what’s left.

A Plan for Your Pay

This kind of budgeting is a plan for how you’re going to spend your money each time you get paid. It’s much easier to control your spending over the course of a week than it is over the course of a month or year.

Most of your plan will be automated, so you can get on with other things in life while your finances take care of themselves!

Here are the steps I use to organise my money each pay.

1. Pay yourself first

Pay yourself first is the number one tip for better financial management.

But how many of us actually do it?

More often than not, we pay the expenses we have to and spend what’s left. We might put aside some money for long-term financial goals, but not regularly.

The first step of your Payday Plan is to pay yourself first before you spend money on everyday expenses.

You won’t miss the money you don’t see. And paying yourself first means you will actually reach your goals.

2. Have a System For Your Bills

Paying the bills is one of the most stressful parts of money management.

Instead of stressing about how you’re going to find money to pay the next bill, the next step is to put money aside each payday to cover upcoming bills.

That way, when the bills come in, you’ve got them covered!

3. Weekly Expenses

Now that you’ve paid yourself first and put money aside for the bills, the next step is to use an envelope type system for the weekly expenses like groceries and entertainment.

Your envelope system doesn’t have to be cash.

Fixed expenses like public transport can be easily accounted for and left in the bank. Because they are fixed (and all your other expenses are transferred out of your account on payday), you know you’re going to have enough in the bank to cover them.

Another alternative for irregular expenses is to use an app to track what you’ve spent. 

4. Factor in Fun

Fun money is essential for keeping on track with your financial goals. Just like dieting, if you’re too strict with your money, you’re more likely to binge spend.

As part of your Payday Plan, allow for some fun money each pay.

5. Plan for Emergencies

An emergency fund is one of the pillars of stress-free financial management. If something happens, you know you’ve got money to get back on your feet.

Each payday put money aside for emergencies. Your emergency fund will grow each week without you even having to monitor it!

6. Eliminate Debt for Life

There’s a reason we’ve left debt until after we’ve saved money for bills.

While it may make sense to throw as much money as possible at reducing debt, it’s actually only a band-aid solution.

How do you pay the bills or pay for emergencies if you’ve been putting all your money towards debt?

That’s right. With more debt.

By first building a system that will meet your everyday financial needs, you will no longer need to rely on debt.

In this step use a debt snowball as part of your Payday Plan to eliminate your debts for good!

7. Build Long-term Financial Security

The last step of the Payday Plan is to put money aside for long-term investments (but only after you’ve paid off your debts)!

Building super and investing in income-producing assets will contribute to your income as well as provide a buffer against future adversity. When it comes to investing, it’s important to seek the advice of a qualified financial advisor. 

A budget can be more than just good intentions and tracking expenses. Instead, use it as a spending plan to get proactive about your saving. 


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  1. As far as budgeting goes we generally avoid credit or debit cards for personal expenses. Every week we get my ‘Spending Money’, in cash, for day to day expenses. Any left over goes into our ‘Stash’ for unexpected things or a fun meal out.

    When we lived in the UK, where monthly pay is more common, we used to divide the monthly money up into 4.5 weeks. This meant twice a year we had gained a spare weeks money!

    1. What a great idea for dealing with monthly pay! Thanks for sharing your tips. A ‘stash’ is a great way to pay for unexpected expenses!

  2. This is how I have always ‘budgeted’ ever since I left home, and I love it! It just seems to make sense for me and my needs. I don’t think there has ever been a time when I have not had money set aside to pay my bills on time. Brian’s idea of the ‘stash’ fund is a great idea.

    1. Hi Natalie, thanks for leaving a comment.

      It’s great to hear this way of budgeting is working for you.

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