How to Create a Spending Plan
KIMBERLY PALMER
We hear a lot about the importance of saving money, but what if learning how to spend is just as important? Michael Hunsberger, a certified financial planner and owner of Next Mission Financial Planning in St. Charles, Missouri, says many of his clients struggle with the spending side of the financial equation, and he wants them to get better at it.
“You built all this money and now you don’t want to spend it,” he says.
Retirees, for example, are often reluctant to spend money when they are no longer earning and know that the money has to last the rest of their lives.
But Hunsberger says coming up with a spending system can help ensure you enjoy those later years.
HERE ARE FIVE WAYS TO DEVELOP A SPENDING PLAN:
ENSURE YOUR SAVINGS ARE SOLID Before you start spending, it’s a good idea to make sure you have enough saved to meet some of your short-term and long-term goals, says Aja Evans, a financial therapist and author of “Feel Good Finance.” “Come up with an amount you would feel ‘safe’ with,’” she says — whether it’s $5,000 or $50,000 — for your emergency fund.
Then, once you hit that number, create a plan that includes spending.
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