Spending Plan: Saving and Spending during Uncertain Times

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Monthly spending tracking is vital as it helps people stay involved in their finances. Paying attention to spending ensures that one stays within his budget and spends wisely. People with financial discipline are capable of conforming to their spending and banking to the set plans to attain fiscal goals.

Actual spending plan: For November 1, 2022, to December 1, 2022

Actual spending	Amount in dollars
Clothing	150
Investments	2000
Entertainment	350
Food	2550
Rent	1000
Saving	1000
Transport	50
Utilities	80
Total	6830

Projected spending within the above period:

Projected spending	Amount in dollars
Clothing	200
Investment	2000
Entertainment	100
Food	2000
Rent	1000
Savings	1000
transport	30
Utilities	50
Total	6380

Comparison between actual spending and projected spending table:

Actual spending	Amount in dollars	Projected spending: Amount in dollars	Difference in Amount
Clothing	150	200	50
Investment	2000	2000	0
Entertainment	350	100	150
Food	2550	2000	550
Rent	1000	1000	0
Savings	1000	1000	0
Transport	50	30	20
Utilities	80	50	30
Total	6830	6380	450

The above information concerning my spending between November and December makes it easy to determine between needs and wants. Needs are the things that human beings cannot survive without, while wants are the things that humans can do without. The two tables above signify the basic needs of food, clothing, and shelter, characterized by rent. Conversely, human wants are embodied by entertainment, utilities, transport, savings, and investment.

After tabulating my information on the actual spending plan and projected spending, I am surprised by the more money I spend on entertainment. In my projected plan, I had planned to spend less than a hundred dollars; however, the amount escalated to over three hundred and fifty in the actual spending. I am also surprised by how much money I use for basic needs. Food, shelter, and clothing take three-quarters of the spending plan, while wants just a quarter. Equally, I am astonished by the huge amount of money I devote on actual spending compared to the projected plan. I am also amazed by the huge amount of cash I expend compared to what I am saving and investing. Saving and investing 3000 dollars and below is dangerous because our future depends on our current investments and savings.

The pattern for basic needs is constant compared to those for human wants. Food, shelter (rent), and clothing remain continual on both tables and consume the larger part of the budget. In both tables, savings and rent form a constant pattern of two thousand and one thousand dollars. Spending on entertainment and clothing is above my plan as I spend much cash unnecessarily. Watching basketball and buying new outfits every month are my entrenched spending habits. The habits are deeply rooted in me, and changing them is a real struggle.

I can earn more money through various means that require sacrifices. Firstly, I must reduce my time watching NBA matches and look for a part-time job. The strategy will ensure that I save extra dollars for future use. Another way I can earn money is by working more hours in the company I am employed in. Since many American jobs pay per hour, asking for more work time will lead to more earnings. Likewise, investments lead to high earnings. I will use most of my earned money into investments hence gaining interest. The interest is extra cash that adds up to my total earnings. Paying my debts is a necessary course. The only remedy for debts is paying; thus, there is no way I can save while operating in debt. Therefore, I will use all my savings to offset the debts and start saving afresh. I prefer the peace of mind that comes with being free of debt.

The changes I can make in my spending habits include using more cash into savings and investments while cutting down my spending on food, entertainment, clothing, and transport. The changes will ensure that I have enough money to use but none to overspend at all. By doing so, my financial future is secured.

Saving is important for every person as setting aside cash is fundamental for creating financial momentum and having a solid monetary future (Kim et al., 2018). Saving provides a person with an exit from the vulnerabilities of life and gives him a valuable chance to partake in a quality life. Saving a certain amount of cash orderly can assist one with directing out of many obstacles and deterrents throughout everyday life. It can uphold an individual in an hour of need and guarantee that his family has something to return to if there should be an occurrence of awful occasion (Kim et al., 2018). Therefore, I can easily reduce my spending on food, clothing, and entertainment to grow my savings.

There are many things that I can do with my savings. I will increase my emergency fund to a contenting sum with my savings. Emergency funds are vital in cushioning uncertainties, including abrupt loss of jobs and health issues (Schuman, 2020). Thus, having a good amount of cash ensures one is free from financial stress during emergencies. As mentioned, I might use my savings to clear my debts, thus living a peaceful life free from areas. Debts, especially those with high interest, are frustrating, especially when it finds a person with no savings. Thus, clearing such debts is a fundamental step to freedom. I might also invest my savings in my retirement account and safeguard my future days off from employment. Retirement savings plays a critical role as it ensures that a person lives a comfortable life in retirement hence avoiding financial strains (Kim et al., 2018). Saving for a retirement plan is significant in ensuring that a person will not become a burden to relatives and family in old age. Therefore, using my savings to grow my retirement account is quite an amazing thing to smile about.

Concerning my spending, there many plans that I am putting in place to ensure that I grow financially and spend the money in a manner that will allow me to save and invest more. Growing financially, in the first place, depends on what a person earns. Thus, to increase my earnings, I must elevate my education level to go for high-paying jobs. Looking at my spending table, there is a dire need to minimize meaningless spending hence achieving the mindset of leaving beneath your means. Spending over two hundred dollars per month to acquire new trends and fashions is a waste of money. I plan to avoid buying fashion and buy clothes in second-hand stores. Likewise, I will not be shopping for clothes every month because I have enough already. Another plan is to reduce the amount of cash I spend on food and drinks. Taking beer every weekend is unnecessary, and I can comfortably leave without it. Another way of reducing spending on food is by buying and cooking in my house instead of purchasing already-cooked food in hotels and restaurants. Likewise, I will be watching NBAs in my room than buying tickets, thus reducing the spending on entertainment tremendously. Finally, instead of fueling my car every day, I will use public transport such as the train, which is cheaper than everyday purchasing of fuel. With all these plans in place, my total spending will immensely reduce, thus achieving leaving beneath your means. Mindset and skills.

Goals & Action Plan

Three months

Goal -Open a savings account:

Pay a visit to the current bank
Have a conversation with the bank about opening a savings account
Start saving with as little as 30 dollars monthly
Continue growing the saving account by increasing the amount of savings each month.

Six months

Goal Open debit card:

Explore debit cards at NerdWallet.com
Run a conversation with the current bank
Make an application for the debit card
Continue making deposits to the savings account anytime and anywhere
Track your savings score.

Twelve months

Goal Meet with a monetary guide to talking about educational loan reimbursement choices:

Explore various plans of student loan repayment at Studentaid.gov
Choose the best student loan repayment option
Meet with financial aid to discuss the best option chosen
Start making the payment with your saving
Continue making the repayments until it is done

References

Kim, K. T., Pak, T.-Y., Shin, S. H., & Hanna, S. D. (2018). The relationship between financial planner uses and holding a retirement saving goal: A propensity score matching analysis. Financial Planning Review, 1(1-2), e1008. Web.

Schuman, P. (2020). Saving and spending during uncertain times: Tips from the Office of Financial Wellness and Education. News.iu.edu. Web.

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Spending Plan: Saving and Spending during Uncertain Times

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