Welcome to Step 6.
Now we have created a Spending Plan for your essential predictable expenses you should be able to see the power in planning your spending, but of course we’re not done yet!
This next step is to identify what else you would like to add to your plan.
As a child you learned to crawl, then walk and then run and the same applies to your spending plan. It will always be a work in progress. As you become comfortable at one level you will start to think “what else is possible?” You will never stop wanting to fit in more, so today’s exercise is about setting goals and then deciding which of those goals are going to be your highest priority.
Nobody can have everything they want, but creating a plan that shows what you need to do to reach your highest priority goals right now will ensure you achieve more than if you had no plan and no goals at all.
Your task is to take 3 different coloured highlighter pens and go through the Transaction List you downloaded in Step 4 and identify your ‘Crawl, Walk and Run’ transactions.
- Crawl – Your absolute necessities.
We have already created your ‘Essentials’ Spending Plan based on a list of common necessities, but there may be some we missed. Is there anything else you would include in your ‘Essentials’ Spending Plan if everything in your life turned pear-shaped, you lost your income and you could only afford bare essentials?
The easiest way to identify these is to consider what you would have in your plan if your little 3 year-old child or grandchild took ill and would die without a $100,000 operation that was not covered by health insurance.
The Essential Expenses we already included are highlighted in the Transaction List in Red… Highlight the transactions you would now like to add to this category in Orange (or Red if you can find a red highlighter).
- Run – Then think about what transactions you would like to add to your Spending Plan that really could be considered luxuries, even if you have grown to take them for granted.
Highlight these in Green.
- Walk – The transactions that are left should be your average everyday expenses that you could do without if you really had to, but they’re not luxuries and they’re not really essential either.
Highlight these in Yellow.
When you have completed this step please CLICK HERE for Step 7.
Your Spending Planner