THE BASIC MONEY

MANAGEMENT WORKBOOK

A Twelve Month Spending Plan for Financial Peace of Mind

- Abridged Edition -

A Stand-Alone Workbook & Supplement to theGirl! Book Series

by Glinda F. Bridgforth

THE BASIC MONEY MANAGEMENT WORKBOOK A Twelve Month Program for Financial Peace of Mind

Abridged Edition: The 12-Month Spending Plan

Glinda F. Bridgforth Bridgforth Financial

GlindaB@aol.com www.bridgforthfinancial.com

Copyright © 2006 Glinda F. Bridgforth All rights reserved under International and Pan-American Copyright

Conventions

Published in the U.S.A

Original Design by Natalia Jacopetti First Edition Published 1994 Morris Publishing

Bridgforth Financial 1300 Lafayette East, Suite 2302, Detroit, Michigan 48207

Tel: (313) 566-0026 Fax: (313) 567-8019

Contents Author’s Note ................................................................................................................... 1

Spending Plan................................................................................................................... 2

Sample Monthly Spending Plan ........................................................................ 6

Sample Daily Tracking ........................................................................................ 8

Spending Plan Annual Recap........................................................................... 10

Spending Plan Work Sheets ......................................................................................... 11

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Author’s Note

he Spending Plan is an essential element in getting

your money straight and making it grow. I have used

it with clients in my financial counseling practice since start-

ing my business in 1990. By creating a plan you assess your

needs and wants. By tracking your spending you can iden-

tify areas of waste and excess. It helps you set perimeters

around your spending. This abridged edition differs from

the original workbook in that it includes only a sample of the

planning and tracking worksheets along with instructions on

how they should be completed. There are no exercises or

debt reduction worksheets and strategies. In this abridged

version you will find the key components that can help you

create financial stability and fiscal freedom. Use them consis-

tently and enjoy the journey to financial peace of mind.

T

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Spending Plan

REMEMBER MY FIRST REACT-ion to hearing the term “Spending

Plan.” I thought it sounded ominous, and wondered suspiciously, “What is this; how can it manage my money better?” After looking at the format, it didn’t take long to understand why the term “Spending Plan” was more appropriate than the word “budget,” with its negative connotations. Budg-eting had always brought up resis-tance and feelings of stress, challenge, discipline, lack, sacrifice, deprivation and failure. Failure because I had never in the past been able to make a budget work and I had never met any-one who had been successful with one.

In time, I came to realize that the Spending Plan is the key to mastering your money. Its purpose is not to limit your spending but to identify what you need for quality of life that has a sense of balance and well being. The plan helps you to anticipate and be prepared for expenses so as not to throw yourself into chaos and not be overwhelmed when trying to meet monthly expenses. Sometimes being

overwhelmed can lead to “financial paralysis:” not opening mail, not pay-ing bills, not corresponding with creditors, not taking care of yourself.

To begin your Spending Plan,

first relax and breathe deeply. Focus your attention on yourself and your needs. Let go of feelings of limitation. Visualize somewhere between realisti-cally what you can afford and ideally meeting all your needs. Some people may find this process extremely diffi-cult because they have never felt com-fortable examining their own needs. Be aware of feelings that come up dur-ing this process and of any areas that take an excessively long time to com-plete. The behaviors could be indica-tors of factors contributing to your “Emotional Money Inventory.” You may want to go back and explore some of those feelings.

Use the steps below in completing

the Spending Plan for the appropriate month you begin the program. Page numbers shown refer to the Sample Pages 6-10 which can be used for guidance.

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Step One: The Monthly Plan

Locate the column entitled “Monthly Plan” on the Monthly Spend-ing Plan form (see page 6). As you go down this column, write in the amount of money you feel will be necessary to meet your monthly needs and to make you feel whole and complete. This is an estimate. You may spend more or less, you may adjust that number later, but for now put an amount there.

Again, as you work your way through the monthly column, if you find there are areas you really struggle with, it usually means that area needs exploring. One client I had could not get past the first category—groceries. When I started coaching her, she got really teary. We discovered that there had always been lots of fights in her family around the dining room table. In addition, as a child she wasn’t nour-ished properly. As an adult she still struggles with trying to buy food for herself, never has much in the refrig-erator, and feels guilty whenever she goes out to eat. Creating positive action steps and affirmations really helped her to attain a new level of awareness.

As you go through the rest of the categories on your Spending Plan, here are a few items to take note of:

• Under Housing, list mortgage, rent, or whatever you estimate as your monthly expense for housing.

• Under Household Items, list gar-bage bags, paper towels, cleaning supplies, light bulbs and other non-food items you buy for the house.

• Under Self Care, write in an amount for exercise or other self-improvement activities.

• Under Recovery (Spiritual Self Im-provement), write down what you tithe at church and/or what you spend on a therapist or support group.

• Under Dependent Care, be sure to list everything you are spending for your children and your parents. It can be very revealing—if you are giving to others, but not to yourself you may suddenly “act out” in some other way.

• Under Transportation, be sure to allow an ample amount for main-tenance.

• Under Entertainment, make sure you maintain balance in your life.

• Under Savings, develop a consis-tency and break it down if you like—so much towards a car, spe-cial purchase, cushion, etc.

• Under Business Expenses, write in all expenses.

• Under Income, in addition to filling in the amount of your salary for a month, be sure to include reim-bursement for business expenses.

Spending Plan

This number refers

you to specific sample forms on pages 6-10.

They are given so that you may follow along with the directions.

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Step Two: Calculate Cash Flow

In the Monthly Category Recap section (see page 7), fill in the monthly plan totals for each expense category. The total amount from each category is your total spending estimate for a month. Now add the income section and transfer the amount to total in-come.

Next, calculate your cash on hand at the beginning of the month, includ-ing wallet, house petty cash and check-ing account balances. Your cash on hand added to your estimated monthly income will be your Monthly Income total. Below that enter your estimated Monthly Expenses Total. Subtracting the Monthly Expenses Total from Cash on Hand and Monthly Income Total is your Cash Flow, either a positive or a negative number. If you Cash Flow is positive, great! You can now analyze that amount and make decisions to in-crease spending in areas where you have been somewhat conservative, or you may allocate additional dollars to the investment part of your Spending Plan or you may make extra payments on your debt. If your Cash Flow is negative, you can deal with it as well. It’s what you have to know; for exam-ple, it will take an additional $500 a month to make sure your needs are met in every category. So you must ei-ther increase your income or decrease your expenses. If after shaving wher-

ever possible form your expenses, your Cash Flow still comes up negative, you should begin to explore ways of in-creasing your income.

A college student I worked with had a negative cash flow of $300. Being in school, she only had limited extra time for working. Her friends said she could never earn $300 in the time she had. But she called and said, “Glinda, if I hadn’t put it all down on paper and focused on it, believing in what had to be done, I never would have found this job that pays me the exact amount I need for the hours that I can work!”

You may not be able to find the ex-tra time or the extra job that will bring in additional income, but there may be other things you can do. There might be something you can sell, or you might want to have a garage sale. Or perhaps you could eliminate a service expense by making a trade of services with someone. The main idea is to identify your needs and develop the plan for getting your goals met.

Step Three: Daily Tracking & Monthly Recap

There are two forms involved in this part of the process: the Daily Tracking (see page 8) of actual expen-ditures for a week, and the Monthly Spending Plan (see page 6) for totaling four weeks of Daily Tracking. This process provides for a comparison of actual expenditures with the estimated monthly plan totals.

Spending Plan

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On the Daily Tracking form for each month, track all the money that you spend, item by item, day by day. If you buy $10 worth of gas, put that down. But if you use a credit card write the amount down in a different color ink. Don’t add it in with your total be-cause you didn’t actually pay cash out. Credit will show up under debt re-payment when you pay for your credit card, but color coding will still allow you to know how much money is out and where it is going. There are five daily tracking forms for each month. Add the daily “expenditures” across. The weekly totals should be carried over to the Monthly Spending Plan for weeks 1-5. Total the expenditures “across,” then transfer to the Monthly Recap section so you can compare what you thought you would spend with what you actually spent. By doing this tracking, you will begin to discover how accurate your estimates were and you will get a much better idea of what your REAL needs are on a monthly basis. It is important to do a Spending Plan monthly because your needs change monthly and you can provide for birthdays and other anticipated special purchases for that month.

This may seem like a lot of work but it quickly becomes second nature and you will be amazed at what you will discover. You may find yourself suddenly spending money that wasn’t in your estimate at all, and then having to take nibbles out of some of your other areas; this may suggest that you need to build your monthly estimate differently. You may begin to notice unexpected rhythms and patterns to your spending. But whatever you be-gin to learn, know without a doubt that your willingness to dedicate yourself to this process will yield amazing results. It’s all part of becoming conscious around money. The attention that you pay to money matters is what eventu-ally leads you out of murky helpless-ness and into a position of power and control.

Step Four: Spending Plan Annual Recap

The Spending Plan Annual Recap (see page 10) should be completed at the end of each month. Transfer the actual expenses from the Monthly Category Recap to this form. Tracking and analyzing these expenses on a monthly basis can alert you to fluctua-tions in spending patterns that may warrant your attention.

Spending Plan

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January 200X

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#1 / Jan / 200X

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Blank Work Sheets

n this section you will find blank copies of the Monthly

Spending Plan, Daily Tracking Sheet, and Spending

Plan Annual Recap. I recommend you print or photocopy

enough sets for a 12-month time frame. You will need 12

Monthly Spending Plans, 60 Daily Tracking Sheets and 1

Spending Plan Annual Recap. A simple way to stay organ-

ized is to place the worksheets in a 3-ring binder with

monthly index tabs. In each section include 1 Spending Plan

and 5 Daily Tracking sheets. Also, consider purchasing 12

pocket folders so when bills come in they can be placed in

the appropriate month for easy accessibility.

Happy Tracking!

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