{\rtf1\ansi\deff0{\fonttbl{\f0\fnil\fcharset0 Courier New;}} {\*\generator Msftedit;}\viewkind4\uc1\pard\lang1033\f0\fs20 SaveMillions - Develop your own money management plan
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Steps to Build Plan
  Step 1 -Track and document your spending
  Step 2 - Organize expenses into categories
  Step 3 - Document your income
  Step 4 - Determine and analyze cash flow result
  Budget Planning Calculator
  Budget Tracking Calculator
  Budget Comparison Calculator (Bankrate)
  Budget Comparison Calculator (CNN Money)
  Monthly Expense Record (pdf)
  3-Month Expense Record (Excel)
  Monthly Expense Record (html pages)
  Monthly Budget Planner (pdf)
  Monthly Budget Planner (Excel)
  Monthly Budget Planner (html page)
Determine and briefly analyze your cash flow result

In the previous steps, you documented your expenses, grouped them into categories, and defined your income. In this step, you will come up with total expenditures for each of the categories, and then add up all these subtotals to determine your total expenses for the month. Then you will subtract the total expense amount from your total monthly income to determine your cash flow result.

To begin this step, you can use the computer program or Web service that you used to track your expenses, you can use our budget planning calculator, or you can just print the calculator and do the computations yourself (it's not that complex). Our calculator has a list of categories predefined for you. If you created your own categories, then create a page that looks like our planning calculator and uses your categories. For each category, enter your cash flow results in the "current spending" column. The amounts will automatically be added together for you and displayed in the "Your spending" block. Now add Your Monthly Income in the appropriate block, click the Calculate button, and you will see the result in the "What's Left?" block. If it is a positive amount, you are done unless you want to make to changes. If it is a negative amount, you have some more work to do.

Although you could perform a thorough analysis of your expenses, what's most important for this initial spend plan is just to adjust your spending so that you don' t exceed your income. Review the totals for each expense category and see if you can't identify some quick areas where you could spend less. Of course, how much you need to reduce your expenses will depend on your situation.

If you only need to cut your spending by $100 or $200, you should be able to easily fix this. First, look at categories like entertainment that aren' t essential and see what you can eliminate. Second, go back to your worksheets and look especially hard at your daily expenses. Could you take your lunch to work, drink regular coffee, or make some other minor change in your life that would provide the extra savings you need?

If you find that you need to reduce your spending by more than $200, you will probably have to make some serious lifestyle changes immediately, or get an extra job to improve your income. With regard to your spending, you will need to perform a thorough analysis of your expenses to identify every possible way to cut costs or increase your after-tax income.

When you identify the changes that you can make, write the reduced category expense totals in the third column of your worksheet. This will be your target amount for the next month.

Once you believe you have cut your spending enough to live on what you make, then it's time to create your initial plan.

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