Develop your own spending plan

One of the best ways to know how and where you are spending your money, is to keep track of your spending. If you have a smartphone, you can use apps to help you not only track your spending, but also categorize it.

How to come up with a plan of your own.

A spending plan includes three categories of spending goals: short-term, medium-term and long-term.

• Short-term spending goals include things that have a lower price tag such as a latte, lunch out and some inexpensive clothing or accessories ($1 to $50-ish).

• Medium-term spending goals include things that cost a bit more and may require you to do some saving first. These types of things may include a new bike, skateboard or video game console. ($50 to $500-ish). Of course if you buy them used, then these things could fall into the short-term spending category.

• Long-term spending goals include purchases that require you to save significantly and over time. These could include post-secondary education, a vacation or a car (more than $500).

The task of saving for a medium-term or long-term goal may seem daunting, but it can happen more quickly than you realize when you keep track of your spending.

To prepare a spending plan, you need to tally your current income from all sources. You also need to list everything you spend money on each month. Your expenses can be divided into fixed expenses and variable expenses.

Fixed expenses

Fixed expenses are those bills you have to pay, and they are usually the same amount each month. They include things like rent, car payments and payments on personal loans.

Variable expenses

Variable expenses may be different from one month to the next. They include food, clothing, transportation, cell phone, vacations, beauty products, recreation, pets, gifts and charitable donations. The good thing about variable expenses is that you have some control over how much you spend on these items.

Here are a few tips to help you stick to your spending plan:

1. Respect the 24-hour rule.

When you see something you want to buy as you are shopping—don’t. Take a deep breath, walk away and wait 24 hours before you decide.

2. Make a shopping list and stick to it.

Be wary of sales. They can lure you into buying more than you need by offering you a discount. Do you really need two of something or four of something just because it is on sale?

3. Do some research.

Compare prices and take advantage of pricematching tools that help you find the best deal.

4. Look for a used version.

Check out an online platform like eBay, Kijiji or Facebook Marketplace, where you can arrange to buy, sell and trade items with other people in your area. Thrift stores are also a great place to score awesome deals. It’s also so much better for the environment to re-use, re-love or re-purpose something that still has life in it.