Personal Spending Plan

AAA

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.

INVESTOPEDIA EXPLAINS '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. Debt-To-Income Ratio - DTI

    A personal finance measure that compares an individual's debt ...
  2. Debt Consolidation

    The act of combining several loans or liabilities into one loan. ...
  3. Marginal Propensity To Consume ...

    A component of Keynesian theory, MPC represents the proportion ...
  4. Income

    Money that an individual or business receives in exchange for ...
  5. Fudget

    A falsified statement of income and expenses. A fudget or "fudget ...
  6. Capital Project

    A long-term investment made in order to build upon, add or improve ...
RELATED FAQS
  1. How does quantifying fixed overhead volume variance show whether a company is profitable ...

    Fixed overhead volume cannot definitively prove a company is profitable, but it can be used to provide an excellent indication ... Read Full Answer >>
  2. What is price variance in cost accounting?

    Price variance in cost accounting is the difference between the actual price paid by a company to purchase an item and its ... Read Full Answer >>
  3. When do I need to project run rates for my business?

    A business might project a run rate if it needs to evaluate potential future outcomes. Common scenarios where a run rate ... Read Full Answer >>
  4. How can a growing business avoid stagnation when using zero-based budgeting?

    Zero-based budgeting is commonly used by companies to review expenses in their annual budgets and create cost management ... Read Full Answer >>
  5. How does zero-based budgeting help lower operating costs?

    Zero-based budgeting helps lower costs by reducing unproductive spending. Zero-based budgeting is a rigorous process that ... Read Full Answer >>
  6. What are the revenue recognition criteria in accrual accounting?

    The major advantages of zero-based budgeting are flexible budgets, focused operations, lower costs and more disciplined execution, ... Read Full Answer >>
Related Articles
  1. Budgeting

    Budgeting As A Single Parent

    Here are some tips to help single parents raise their kids on a more comfortable budget.
  2. Budgeting

    How To Stay On Track With Your Budget

    Sticking to a budget and making savings is the only way to put yourself on a firm financial footing.
  3. Savings

    Budgeting Tips For Different Income Brackets

    While each individual's financial goals and needs are unique, there are some common pieces of advice that apply to each segment of the financial spectrum.
  4. Budgeting

    How To Fireproof Your Budget

    If you are ever faced with a crisis, here are some budget tips to help you prepare financially.
  5. Personal Finance

    Where America's Health Spending Goes

    You know you've wondered about it. So we give you a little peak into where the dollars go.
  6. Personal Finance

    4 Pricing Strategies That Increase Your Spending

    Find out whether you're actually saving money, or if you're being duped into unnecessary spending.
  7. Budgeting

    Bailing On Your Budget

    Being realistic and honest with yourself will help you determine if you should throw away your existing budget.
  8. Personal Finance

    5 Outrageous CEO Spending Abuses And Perks

    From expensive office redecorating and $1,200 trash cans to million dollar relocation costs, some CEOs get extraodinary treatment.
  9. Budgeting

    7 Austerity Measures For Your Personal Budget

    Many European countries are implementing tough austerity measures to curb their spending. Find out how you can do the same to your household budget.
  10. Active Trading

    6 Spending Tips From Frugal Billionaires

    You don't get to be a billionaire by spending a lot of money.

You May Also Like

Hot Definitions
  1. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
  2. Moving Average - MA

    A widely used indicator in technical analysis that helps smooth out price action by filtering out the “noise” from random ...
  3. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  4. Productivity

    An economic measure of output per unit of input. Inputs include labor and capital, while output is typically measured in ...
  5. Variance

    The spread between numbers in a data set, measuring Variance is calculated by taking the differences between each number ...
  6. Terminal Value - TV

    The value of a bond at maturity, or of an asset at a specified, future valuation date, taking into account factors such as ...
Trading Center