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. What's the difference between the income effect and the price effect?

    The price effect is the impact on the market based on how the consumer is spending money as a result of the income effect. ... Read Full Answer >>
  2. What effect does the income effect have on my business?

    The income effect may have positive or negative consequences on a small business, depending on many factors. The income effect ... Read Full Answer >>
  3. What's the difference between the substitution effect and the income effect?

    The substitution effect refers to consumers spending money on items of lower value, while the income effect refers to how ... Read Full Answer >>
  4. How do I import QuickBooks Pro Account trial balances for the first time?

    You figured out how to create invoices, track sales, streamline your bookkeeping and gather data on your business with Intuit's ... Read Full Answer >>
  5. How does deflation impact consumers?

    Deflation impacts consumers positively in the short term but negatively in the long term. In the short term, deflation essentially ... Read Full Answer >>
  6. What is the difference between residual income and passive income?

    Passive income is money that is earned from an enterprise that has little or no ongoing effort involved. Residual income ... 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. Venture-Capital-Backed IPO

    The selling to the public of shares in a company that has previously been funded primarily by private investors. The alternative ...
  2. Merger Arbitrage

    A hedge fund strategy in which the stocks of two merging companies are simultaneously bought and sold to create a riskless ...
  3. Market Failure

    An economic term that encompasses a situation where, in any given market, the quantity of a product demanded by consumers ...
  4. Unsystematic Risk

    Company or industry specific risk that is inherent in each investment. The amount of unsystematic risk can be reduced through ...
  5. Security Market Line - SML

    A line that graphs the systematic, or market, risk versus return of the whole market at a certain time and shows all risky ...
  6. Tangible Net Worth

    A measure of the physical worth of a company, which does not include any value derived from intangible assets such as copyrights, ...
Trading Center