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How to Create a Money Management Plan That Works

Published: March 2019

Maybe you have debts you’d like to eliminate. Or, perhaps you’re living paycheck to paycheck and don’t have a handle on how you’re spending your money. Trying to meet a financial goal without knowing where your money goes can feel like trying to fill a bucket with a hole in it.

Part of the solution is paying attention to every dollar you spend — which can be simpler than you’d expect. Follow these tips to help manage your money better and keep your spending in check:

Young family looking over budget at table.


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Track What You Spend

The idea behind tracking your spending is simple: every time you spend money, write it down or enter it into a budgeting tool or spreadsheet. Keep track of not just how much you spent, but what you paid for, the date and where you spent the money. This may help give you an idea of where your money is going and give you insight into your spending habits, says the Consumer Financial Protection Bureau (CFPB).

Here are a few tips for tracking your expenses:

  • Write it down. Keep a small notebook with you, and hand write every purchase you make. The Balance notes that this method can be helpful in keeping you aware of your spending habits throughout each day.
  • Use a budget worksheet or spreadsheet. This can be an easy way to organize and tally your spending.
  • Use an app or online tracking tool. Forbes notes that some apps even connect to your bank account and provide regular updates on activity.
  • Collect your receipts. Keep your receipts and add the information to your tracker at the end of the day or week.

As you track, the CFPB suggests noting if:

  • Any expenses surprise you or are unnecessary
  • You’re paying for services or subscriptions that you never or rarely use
  • There are expenses you could eliminate, such as credit cards with annual fees or a subscription service
  • You spend differently during the week than on weekends

After at least a week or two of tracking, you can analyze your spending and start prioritizing.

Set a Budget

Once you’ve determined how you’re spending your money, it’s time to set priorities and establish a monthly budget. Start by figuring out your monthly income, minus taxes, says Subtract your regular bills, such as mortgage payments and utility bills, and quarterly or annual bills, such as insurance premiums. This will give you an idea of what you have left to spend on other needs, such as food, and discretionary items, such as entertainment. Consider how much you would like to save, as well.

Get Into a Routine

To help you stick to your budget, The Balance recommends that you keep tracking your expenses. This will help you compare what you actually spend versus how you planned to spend it. Keep in mind that it may take a little while to settle into a system that works for you and helps you meet your goals.

To keep yourself focused on actively managing your spending (and saving), The Balance recommends:

  • Reviewing your budget. Going over your budget and expenses once a month for the first six months may help you adjust your original estimates and identify where you can cut some spending.
  • Balancing your checking account each month. Checking to see which transactions have cleared and which are still outstanding gives a more accurate picture of your current balance, says
  • Setting new goals. If you’ve met your original goals or your finances have changed, set new goals for the month or year. For extra motivation, choose rewards for yourself once you meet those goals.
  • Cutting where you spend most. Try reducing your expenses in areas where you tend to spend the most. Small changes, like lowering your monthly grocery budget by a few dollars or switching to a less expensive cellphone plan, can add up over time.

Managing your money doesn’t have to be complex. Tracking your spending and prioritizing your expenses may help you get (and keep) your budget on track.

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