DEFINITION of 'Personal Spending Plan'

A document used to determine the cash flow of an individual or family. A personal spending plan, similar to a budget, helps outline where income is earned and expenses are incurred. When paired with a financial goals worksheet, the personal spending plan can be used to create a roadmap for monitoring spending, as well as helping determine the most appropriate methods for saving.

BREAKING DOWN 'Personal Spending Plan'

A personal spending plan is a different take on the traditional budget. While many people may be familiar with their sources of income, such as a salary from a job, fewer know the patterns associated with where that income is spent.

The personal spending plan is often more detailed than a standard budget because it requires more information about each item. By documenting and categorizing all sources of spending, individuals and families can better understand whether funds are being spent on items that detract from their ability to save for and reach their financial goals.

Financial goals are integral to making a personal spending plan work. Financial goals, such as saving money for a vacation, help individuals determine how much money should be diverted from living expenses into savings and investing. 

RELATED TERMS
  1. Spending Phase

    The period in a person's life following retirement in which earning ...
  2. Personal Income And Outlays

    A set of two data points produced by the Bureau of Economic Analysis ...
  3. Federal Budget

    The federal budget is an itemized plan for the annual public ...
  4. Financial Plan

    A comprehensive evaluation of an investor's current and future ...
  5. Personal Income

    Total compensation received by an individual. Personal income ...
  6. Annual Budget

    Any budget that is prepared for a 12-month period. An annual ...
Related Articles
  1. Personal Finance

    This Is the Year to Start Budgeting

    Whether your issue is credit card debt, student loans (or the fact that Social Security isn't rising next year), it's time to learn how to build a budget.
  2. Financial Advisor

    10 Ways to Effectively Save for the Future

    Savings is as crucial as ever, as we deal with life changes and our needs for the future. Here are some essential steps to get started, now.
  3. Financial Advisor

    How to Avoid Common Middle-Class Money Traps

    Spending is inevitable, but by budgeting carefully, families can enjoy financial security while dodging unnecessary stress or hardship.
  4. Insurance

    Five Rules to Improve Your Financial Health

    Learn five broad personal finance rules that can help get you on track to achieving specific financial goals.
  5. Personal Finance

    How to Create a Budget You Can Stick With

    Following a budget can be difficult. But it’s usually the difference between living a stressful retirement versus the retirement of your dreams.
  6. Personal Finance

    Say "I Do" To Financial Compatibility

    Make a commitment to prevent finances from souring your relationship.
  7. Managing Wealth

    5 Articles to Refresh Your Financial Literacy

    Being smart about things financial can make the difference between a shaky future and a comfortable one
  8. Investing

    What's Your Idea Of Budgeting?

    Is your idea of a budget simply spending till your checking account is nearly empty? Or worse, till your credit limit is exhausted?
  9. Personal Finance

    10 Ways To Budget When You’re Broke

    Budgets are some of the best financial tools around – when planned properly and followed faithfully.
  10. Managing Wealth

    I Make $50K a Year: How Much Should I Invest?

    Find out how much to invest each year if your annual income is $50,000. The key is knowing the final benchmark for your retirement goal.
RELATED FAQS
  1. Why should I bother creating a budget?

    Creating and using a budget is a valuable tool for all demographics; it's not just for those who need to closely monitor ... Read Answer >>
  2. What is the best way to budget for holiday and special event spending?

    Even though holidays and special events arrive sporadically throughout the year, you can still fight the costs associated ... Read Answer >>
  3. How do I stop emotional spending?

    Emotional spending occurs when an individual spends money for the sole purpose of improving a mood. Some reasons people engage ... Read Answer >>
  4. What mobile apps are best for tracking your cash budget?

    Discover the best mobile apps for tracking cash budgets to manage spending, increase savings and improve your overall financial ... Read Answer >>
  5. How can I budget for both short-term expenses and long-term goals?

    The first step in planning for long-term goals is actually determining how much you spend on short-term expenses. Once you ... Read Answer >>
  6. What's the difference between budgeting and financial forecasting?

    Learn about financial budgeting and financial forecasting and the main differences between the two management decision-making ... Read Answer >>
Trading Center