Budgeting is touted as some kind of cure all for many money problems. Spending too much? Create a budget! Not sure where you can save? Create a budget? Want to put more money into savings? Create a budget?

But for some of us, budgets don’t really work. It’s not that we’re bad with money. Instead, it’s just that budgeting doesn’t work for us. Maybe our bills are too variable, maybe we just don’t think in that format. No matter what, though, we just aren’t good at maintaining a budget, no matter how good we might be with the rest of our finances.

It’s not the end of the world, though. There are alternatives to budgets, that allow us just as much control over our money and where it goes. There are two in particular that I would like to focus on today.

The Spending Plan

A spending plan is a more flexible approach to money than budgeting. Rather than listing out all your bills for the next month and projecting your other expenses, a spending plan is a more general idea of your financial situation and where it’s going. It focuses on financial goals, rather than expected expenses and many people find it easier to use to get out of debt and save because of that fact.. You can create a spending plan for the next month, the next year or whatever length of time you find convenient.

A good spending plan should include the following:

• The income you expect to receive during the length of your plan — Don’t forget to include any windfalls, such as bonuses or gifts that are on the horizon.
• A list of fixed expenses, such as the telephone and cable — Include a general estimate of variable bills here, such as gas.
• A list of debts — While you may include a regular payment towards your debts in your fixed expenses, add the whole amount here. It can help clarify what your financial goals are (and where unallocated money might be best used).
• Large expenses you expect in the near future — If you know you’re going to need to replace your furnace or car, adding that information to your spending plan can remind you to allocate money to savings.

The Balanced Money Formula

The balanced money formula comes straight out of All Your Worth: The Ultimate Lifetime Money Plan. Instead of looking at expenses or goals, this approach focuses on income, and how you allocate it. If your spending is balanced, no more than 50 percent of your income will go to your ‘needs’ — those expenses you absolutely have to pay, such as housing and food. If you can get your needs down to 35 percent of your income, you’re doing amazingly well.

Of the remaining portion of your income, at least 20 percent should go to ’savings’ and you can use up to 30 percent for ‘wants’ — expenses that aren’t necessary, but you may want. Entertainment generally fits in this category, among other things.

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