Explain Why Is It Important For You To Develop And Maintain A Spending Plan

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Why is it important for you to develop and maintain a spending plan? As appointed to be your financial advisor I feel I’m obligated to address the questions I know you must have, starting off with the most obvious ones first, why is it important to develop a spending plan? A spending plan is an important part of financial planning because it helps you take control of your spending, and, therefore, control your financial future. The first step to creating a spending plan is to determine how much money you earn and how you spend it. The record of your earnings and expenses on your Income and Expense Statement ensures that your spending plan is realistic.The most effective Spending Plans are those that are personalized. In the next step you should …show more content…
The last step is to evaluate how well your spending plan is working and make any necessary adjustments. If you find it easy to stick to your plan, then your Spending Plan works well and doesn’t need adjusting. If you are having difficulty holding your spending within the allocated amounts, ask yourself if the amounts are realistic. Consider your goals when evaluating and adjusting your spending plan; this may determine if adjustments are needed. I also made changes to your January Income and Expense Statement in order to develop your spending plan. I increased the amount of your emergency savings fund, increased your monthly car loan to pay the loan off faster, I decreased the anointed money spent dining out at restaurants and spent buying clothes. I think you should make more specific goals after creating your spending plan. Some of your new, more specific goals should be to increase your contributions to saving and investments, decrease your monthly entertainment expenses, and decrease your personal care expenses. Decreasing your unneeded expenses will increase your net worth or allow you to profit savings. I would recommend that you guys reach out to applications online for means of a control

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