Before I explain what a Spending Plan is, I want to explain what a Budget is:

A budget is where people make a list of their incomes, and often there is usually only one or two. They start with incomes because it is easy. Then they will list their expenses. All of their expenses will be averaged down to a per pay cycle. You might pay your rates twice a year, but you would add up your annual cost and divide by 52 if you get paid weekly or 26 if you get paid fortnightly so you can compare that part of your budget with your income. So you end up averaging all your costs down into a per pay amount then you add up your costs on one side, You look at your income on this side and your expenses on that side and you ask the question- “Does this work?” And if you have more income than expenses you’d go “Yes”, and if you have more expenses than income you’d go ”No”, then you would go back to your expenses and see what you could chop out or think about how you could increase your income. The problem is, and it’s a wonderful exercise to go through, although it’s a big waste of time, but it’s a wonderful exercise if you have never done it. But at the end of it, all you’ve got is a document that says, “Hey, you guys should be able to pay your way, You should be able to make ends meat.”