How money wise are you?

We are all at different levels of the financial spectrum. Ask yourself the following questions and ​choose the level to which you agree or disagree, with “10” meaning the completely agree and “1” meaning you completely disagree.

I can easily make debt payments
I am financially prepared for an emergency
I feel comfortable with my level of giving
I have a plan for managing any unexpected windfall money
I plan for my financial goals
I do not regret purchases I have made
I have never had an argument about money
I stop and think before making a purchase
If I use my credit cards, I pay the balance off each month
I feel in control of my money
I am financially preparing for the future
I feel I have enough money

Money Management Basics 

These are the most important aspects of money management. Incorporating these basics into your money management plan will put you in control of your money instead of it being in control of you.

  1. Distinguish between wants and needs. Know the difference between your wants and needs. Take care of your needs first, then satisfy your wants as funds are available.
  2. Set financial goals. Determine short-term, long-term and investment goals. Setting specific financial goals keeps you motivated to balance your spending plan.
  3. Make a spending plan. A Spending Plan brings freedom! Determine your monthly income, expenses, and debt payments and periodic expenses.
  4. Track your daily expenditures. Be aware where your money is going. Use a tracking sheet to identify and plug up your spending leaks.
  5. Live within your means. Compare your total expenses to your monthly income.
    Make sure expenses don’t exceed income. Don’t use credit to make up the difference between your income and expenses. Be aware of your total debt.
  6. Use credit wisely. Use credit for planned purchases and emergencies only (not impulse purchases). If possible, only charge what you can pay off every month. Track what you spend—when you pay interest, the cost of what you buy increases. Avoid paying only the minimum due. Don’t charge more every month than you are repaying to your creditors. Credit payments should not exceed 20% of your net income. If you are in serious debt it may be wise to discontinue the use of credit.
  7. Build your savings. Set aside funds for periodic expenses such as car repairs, medical bills and taxes. Accumulate at least 3-6 months expenses in an emergency fund. If you are not in serious debt, save for short and long-term financial goals. Save at least 5%-10% of net income.
  8. Be current with your financial obligations. Maintain a good credit rating. If you are unable to meet your credit obligations contact your creditors immediately and explain the situation. Don’t borrow from one creditor to meet another obligation.


Objective: To track your spending to know where your money goes—particularly cash spending. Once you know how you are spending your money, you can develop a realistic spending plan.

General tips:

    Track Spending
  • The average family loses between $50–$300 per month that they have no idea where it is going. Tracking helps you to stop up those spending leaks?
  • Track all of your variable and periodic expenses such as food, clothing and personal care. Do not track items that are paid only once a month such as rent o car payments. These are easy to determine from your checkbook.
  • Track expenses from payday to payday. Track for a minimum of one month so that you can record a full cycle of your spending habits.

How to track:

  1. Write down your pay periods on a tracking sheet. If you get paid on the first and the 16th your pay periods run from 1-15 and 16-31.
  2. Write down every category that you spend money in a box on the tracking worksheet. Review the list of categories on the tracking worksheet to give you some ideas.
  3. Record everything you spend in that time period on your tracking sheet, even if it’s only a can of coke from the vending machine. A 50-cent can of coke every work day would add up to $2.50 per week! Don’t round up to the nearest dollar—pennies count too! Circle any expenditures that you purchased on credit. Couples could have two separate sheets, or have one posted on the fridge that both fill in at the end of the day.

Download Tracking Sheet (PDF)



There are two ways you can do this:

  • Keep your tracking sheet with you and record purchases as they occur.
  • Save receipts of all purchases, write down what they were for, and transfer them to your tracking sheet once a day or once a week.

Setting Financial Goals

Setting specific financial goals is one of the most important elements in creating a Spending Plan. They keep your course straight and keep you motivated to use your money and credit wisely.

To set specific financial goals:

  • Write down each of your short-, mid- and long-term goals.
  • Determine the cost of each goal.
  • Determine when you would like to achieve the goal.
  • Divide the number of months into the total cost to determine the monthly savings amount needed.

Download Financial Goals Sheet (PDF)


Steps in Creating a Spending Plan

Making a spending plan enables you to control your money instead of it controlling you.

Step 1: Look at your income

  • Note dates that income will be received in the “pay days” column on the Spending Plan Worksheet on page 7.
  • Enter your monthly net income (after taxes) from all sources in the “monthly total” column (jobs, alimony, child support, social security, welfare, unemployment, disability, rental income, etc.).
  • For income received infrequently, estimate yearly total then divide by 12, then enter that total into the monthly total column.
  • In the “periods 1-4” columns record which week of the month the income will be realized. This will later be used to ensure that your income will be available to meet your estimated expenses for each week.
  • Move totals down to the Summary section of the Spending Plan.

Step 2: Make a spending plan

  • Note the due date of each expense.
  • Estimate each expense category as accurately as possible in the “monthly total” column. There are 3 types of expenses:
  • Fixed Expenses normally stay the same each month and must be paid to maintain essential goods or services such as: rent/mortgage, car payments, and insurance payments.
  • Variable Expenses are usually paid each month, but you have some control over the amount spent as: food, personal care, and clothing. Estimate the monthly expenditures as accurately as possible, or figure the monthly average by taking your total annual expense and dividing by 12.
  • Periodic Expenses (*) don’t occur every month such as: car repair/maintenance, taxes, and medical expenses. These expenses can catch you by surprise and wreak havoc with your Spending Plan, so set money aside for them every month. Take the entire projected yearly amount and divide by 12.
  • Record which week of the month the expense will be due in “week 1-4” columns. Ensure expenses are evenly distributed within columns. If expenses are too high during one week move them to another so that there will be enough income in that week to cover the expenses.
  • Move totals on to the Summary section of the Spending Plan.

Step 3: Include your debt and credit obligations

  • List all of your non-mortgage debt payments not included elsewhere in your Spending Plan including credit cards, student loans, lines of credit, bank loans, etc. Note the total debt and then the monthly payment for each.
  • Move the total of B to the Summary section of the Spending Plan. Move the total of A to the liabilities section of the Balance Sheet on page 10.

Step 4: Sum it all up

  • Add your monthly expenses and your monthly debt payments to determine your total monthly expenses.
  • Determine your monthly balance (+) or deficit (-) by subtracting your monthly expenses from your income.
  • If you have a positive monthly balance—congratulations! Set some new financial goals and work them into your spending plan.
  • If you have a monthly cash shortage, start with the variable expenses and review your spending plan to determine where you can cut back your expenses.

If you are unable to balance your income with your expenses contact a financial counseling organization such as Consumer Credit Counseling Service for assistance.

Download spending plan worksheet (PDF)


Are Your Finances in Balance?

Your monthly salary and your installment loans are only a part of your total financial picture. To determine your Net Worth, subtract your total liabilities (what you owe) from your total assets (what you own).

Download Balance Sheet (PDF)



Budget Guidelines

Budget-GuidelinesA good—but generalized—guide to budget development in the Spending Plan Pie Chart. After you have determined where your money goes each month, compare it to the chart. You may find your financial allocations to be very different from the standard model. If you have no debt, you have more room in your budget for other “pieces of pie.” If your housing costs are eating 50% of your income, you may not have room in your pie for high transportation costs. Visualizing your financial picture demonstrates where your money goes each month, and can help you make wise spending choices.


Cash Management System

Want to keep on track with your financial goals? A cash management system is a good option for an individual who wants to keep a tight hold on their finances to ensure they are getting the most for their money.

Step One

Set up an envelope or folder system with a section for each of the variables and periodic categories you budgeted for on your Spending Plan such as:

  • Groceries
  • Personal care
  • Medical
  • Dining out
  • Gasoline
  • Vacation fund
  • Clothing
  • Car repair
  • Car maintenance

Step Two

When you deposit your paycheck, bring money home in $5, $10, and $20 denominations. Distribute the cash in the envelopes according to your plan.

Step Three

Leave your checkbook and credit cards at home and take cash with you when making expenditures. It will take some advance planning to ensure you have sufficient cash for your purchases, but it will help you to make spending decisions that are consistent with your financial goals. Continue to write checks for bills you must mail such as: Rent, Utilities, Insurance, etc.

Step Four

When you spend money from an envelope, replace it with the purchase receipt. At the end of the month, total up all the receipts for each category. This will help you to track where your money is going, and help you become better aware of unnecessary expenditures.

Step Five

If your wants in one expense category exceed your available cash, don’t take money from other envelopes. Re-evaluate your true needs for that category and increase the amount allocated to it if necessary. Let unspent money accumulate in the envelopes so it is available when you need it.

Downsizing Your Debt

One of the smartest things you can do for yourself financially and emotionally is to pay off your debt. It gives you an immediate raise!

Payoff strategies

  1. Stop buying on credit. Think of credit cards as plastic tools for taking out loans. Would you go to a bank and borrow $40 for dinner?
  2. If you use credit track what you spend (use the Charge Record on page 15 to track spending). Keep your non-mortgage credit payments to 20% or less of your take home pay.
  3. Call your credit card companies and see if they will lower your interest rates. Many will do so for their good customers when asked.
  4. Transfer your debt to one or two low-rate credit cards. If the card has a low introductory, or “teaser”, rate, make sure the interest rate you are charged once that expires is low too. Also, be careful to avoid charging up your old cards. If you do, you will only be increasing your debt, not decreasing it.
  5. Increase your payments–if you stick to only the minimums, it could be years before you are debt free. To save the most money, send extra cash to the cards with the highest interest rate first. Or, if you want to see progress more quickly, focus on paying off the cards with the smallest balances. To see how long it will take you to pay off your debt, use the financial calculations on our website at www.cccssf.or/education/calculators.
  6. Use savings to pay off debt. It doesn’t make sense to pay 18% interest on a credit card to earn 3% on a savings account. Don’t, however, deplete your savings for periodic expenses. If your car breaks down, you don’t want to use your credit card to fix it.
  7. Send in your payment as soon as you receive the bill. Interest is usually calculated on an average daily balance, so every day you can reduce the balance, the more you will save in interest. Make more than one payment a month if possible.
  8. A consolidation loan is an option. However, low-rate loans can be difficult to get – particularly if you are carrying a large debt load or have credit problems. Beware of finance companies whose interest rates are higher than a credit card. The lower payment can be tempting but it will cost you more in the long run.
  9. Pay more than the minimum scheduled payment (2%) of the remaining balance each month; it would take almost 30 years to pay off the debt. Even if you made “power payments” of the initial $40 minimum payment each and every month, it would still take 8 years to pay off.


10 warning signs of credit trouble

  1. Paying only the minimum amount due on your credit cards
  2. Charging more each month than you make in payments
  3. Using credit and cash advances for items that used to be purchased with cash, like gas and groceries.
  4. Having a total credit balance that rarely decreases
  5. Being at or near your credit limit and applying for new cards
  6. Needing a consolidation loan to pay existing debt
  7. Not knowing the total amount that you owe
  8. Experiencing feelings of anxiety and stress whenever you use your credit cards
  9. Draining your savings to pay debts
  10. Making bill payments late

Stretch Your Dollars

Finding little placed here and there that you can reduce expenses is key in helping you to meet your financial goals. Circle the items that you plan to put into practice in the next 60 days.

Saving on food costs

  1. Plan your meals one week at a time. Review grocery ads to take advantage of specials.
  2. Make a shopping list from your menu plan and the grocery ads. Post it on your refrigerator so you can keep a running list of what you need. When you shop, buy only what’s on your list.
  3. Shop only once per week. You’ll spend less and have more free time.
  4. Grocery shop when you are not hungry – you’ll buy less.
  5. Use coupons for items your normally purchase if they are the best buy. Don’t buy something you don’t like just because you have a coupon for it.
  6. Buy generic or sale brands whenever possible. Look carefully, a name brand on sale could be more expensive than the generic brand at a regular price.
  7. Compare item price per unit—pound, ounce, dozen or package. Take your calculator with you! Buying a larger amount is usually more economical.
  8. Reduce purchases of snack and “junk” foods. Substitute fresh fruits and vegetables, juice drinks, and popcorn.
  9. Don’t buy convenience foods—make your own. Buy less expensive, more simple foods and drinks.
  10. Waste less! Plan the use of leftovers (planovers) and wrap and store items carefully.
  11. Double or triple recipes for spaghetti sauce, chili, and soups. Label and freeze for later use. This saves time and money.
  12. Entertain with pot-lucks or inexpensive buffets, serving meals such as spaghetti, lasagna and salad.
  13. Take your lunch to work and cut down on meals away from home.
  14. Buy produce at Farmer’s Markets. It’s fun, fresher and cheaper!

Saving on transportation

  1. Have the scheduled maintenance done on your car. It is safer and cheaper in the long run.
  2. Learn how to do your own car maintenance. Take a class at a local Junior College if necessary. Change your oil and air filters as recommended by your service manual.
  3. Use self-service gasoline pumps. Occasionally check oil and water levels.
  4. Form car pools to go to work, meetings and kid’s events.
  5. Cut down on short trips. As yourself, “Do I really need to make this trip?”
  6. Make lists of “things to do” and “things to buy” before you leave the house. Determine a route which uses your time and gas most efficiently.
  7. Maintain and repair your existing car instead of buying a new one.
  8. Protect against salt, rust and scratches by waxing your car at least every three months.
  9. Increase deductibles on auto insurance to $500.
  10. Shop for the best value in car insurance. Check for multi-car and good student discounts.
  11. Consider dropping collision insurance when your car’s value has dropped signi􀏐icantly.
  12. Have kids use school and public transportation whenever possible.

Saving around the home

  1. Learn how to refinish furniture. Get a book from the library or second-hand bookstores.
  2. Learn to clean and fix household items yourself.
  3. Reduce purchases of cleaning supplies. Buy products that have multiple uses.
  4. Make small repairs to your home before they become big problems.
  5. Wash your walls instead of painting. Paint rather than re-plaster.
  6. Experiment with sponges, crumpled newspapers, rags, feather dusters to create your own painted “wallpaper.” Paint walls a base color in latex paint. Take 1 cup of base color, add a small amount of another color, dip one of the “daubers” in the new color, and touch the wall in rows or in a random pattern.
  7. Clean out the attic and garage and have a yard sale. Get rid of stuff!
  8. Reduce use of air conditioning and open windows.
  9. Check the effectiveness of your insulation and improve where needed.
  10. Install an attic or roof fan.

Save money on clothing

  1. Choose simple, basic styles that can be dressed up or dressed down depending on the occasion.
  2. Try to avoid fad or novelty styles that will be out of date next season. If you do buy these pieces, purchase at discount stores.
  3. Have your colors and personal style evaluated so you can buy clothing that works for you.
  4. Buy coordinated clothing that you can mix and match. Three tops and three bottoms can make nine outfits.
  5. Purchase new inexpensive accessories to jazz up an existing outfit.
  6. Check out discount stores, clearance centers and factory outlets. Don’t forget second-hand clothing stores.
  7. Plan your clothing purchases carefully, make a list of what you need, and then shop with those things in mind. Avoid impulse purchases.

Yearly Spending Plan

Download Yearly Spending Sheet (PDF)


Spending Plan Worksheet

Download Spending Plan Worksheet (PDF)