Step #1

Where are you Now!

You can't get to where you want to be until you first know where you are now. Fill out this form to know what you are spending. Don't try to make it look good. Make it as realistic as you can. The more realistic it is the easier to make your new spending plan work.

Click the image at left for a PDF download.

Step #2

Develop a Guide Line Spending Plan

You need a Guide Line budget. How much should you be spending in each category, based upon what others in your income range should spend for a family of four.

Look at the Percent Guide Line sheet from Larry Burkett and write the % next to each category. Then multiply the Net Spendable income by the % for each category. See the Sample Guide Line sheet attached.

Step #3

Develop New Spending Plan

Fill out another Income & Expense Sheet to reflect your new target spending plan. Keep this updated to reflect any changes in your spending or income.

If the Income and Expense Sheet from Step 1 is in the black you still need to look at the % of your Net Spendable Income for each category to maximize your surplus.

If you are in the red, you need to take a serious look at all your spending categories to see where you can cut spending. Don't act like a politician, spending must be cut. You can increase your income, but that may take some time. Open your mind to any changes in your spending habits. It is easy to look at your spending and say "I don't see anything I can cut.

I once helped a couple that was having a hard time paying their bills. They were making $130,000 a year, but could not see how to cut their spending. Now their first option to look at would not be how to increase their income. Maybe if they were making $30,000 a year that would be an option to highly consider. It was easy for me to go through the Income & Expense Sheet to show them areas to consider to cut back in.

This will take a little work and it is good to set down with a financial counselor to help you. Husband and wives can find these spending decisions to be stressful. I try to encourage couples at this point. It will be better if you work a plan.

Step #4

How to Manage Weekly

Ok, now you have created a new Income & Expense Sheet that reflects how much you wish to spend in each category, (notice I said "wish"). The question now is "How can you control your spending in each category so not to over spend in each category before the month is over"?

Larry Burkett's method was to create a control system that acts like the envelope method. It works likes this, if there were no checks or credit, and everything was done in cash. We would use 11 envelopes one for each budget category. On each payday you would put a portion of each paycheck into an envelope for that months planned spending. Each paycheck would be divided into several envelopes until the envelope budget quota was met. So the control is when the envelope is empty, spending for that category should stop.

Now, this day and time we use a checking account so we will us a ledger sheet instead of envelopes for control of spending.

Don't get discouraged if your have to re adjust the spending plan numbers. You will have to do that. It will take 6 to 9 months working with your spending plan to get it to work. You are trying to adjust your spending habits. It will take more than one month to change them.