A few years ago, my husband and I didn’t have a plan for our money.

And because we didn’t have a budget, we didn’t have a handle on our finances.

We would find ourselves in the overdraft around the 10th of every month, yet somehow we were still enjoying holidays in Europe. To say that our finances were in a bit of a mess would be quite an understatement.

We weren’t tracking our spending, and we had no clue where our money was going.

Then one day, I came across something on YouTube that really got me thinking. What if we created a budget and started tracking our expenses? Surely, that would give us a clearer understanding of where our money was going, help us get a grip on our debt, and finally manage our finances more effectively.

That small moment of inspiration was the turning point for us, and it’s something I now encourage everyone to do. After all, everyone needs a way to see where their money is going.

Our first step was to change the word ‘budget’ to intentional spending plan. The word budget has so many negative connotations that we wanted to create something more positive!

That’s when the Intentional Spending Plan was born!

Whether you prefer apps, spreadsheets, or the classic paper and pencil method, an intentional spending plan can be a game-changer. It can show you where you’re at financially, help you regain control, and make it easier to manage your money more effectively.

We use a Google Doc. It’s super simple, easy to edit and we share it – a bonus if you share your finances with your partner. If you’d like to use the exact plan that we use, click on this link and download your Intentional Spending Plan for free today!

If you’re ready to get started, here’s how to create an intentional spending plan that works for you.

Step 1: Calculate Your Net Income

Let’s start with the basics—your net income.

Your net income is the amount you actually take home after deductions like taxes, insurance, and retirement contributions have been subtracted from your gross salary. While it’s easy to get confused between gross and net income, it’s crucial to focus on your net income because that’s what you have available to spend.

If you’re a freelancer or self-employed, keeping track of your income might feel a bit like juggling, but a reliable spreadsheet can be your best friend in this case. By recording your income regularly, you’ll have a clear picture of what’s coming in and be able to plan accordingly.

Understanding your true income is the first step towards an intentional spending plan. Once you know how much money you have to work with, you can start making informed decisions about how to allocate it.

Step 2: Track Your Spending

Before we dive into creating an intentional spending plan, let’s make it fun! How much do you think you spend each week? Write it down.

Now, for the next seven days, track every penny you spend—yes, even the smallest expenses. At the end of the week, compare your estimate with the actual figures. Were you close, or did you underestimate?

Most people are surprised to learn that they spend much more than they think. But don’t worry—this is exactly why tracking your spending is so important. It opens your eyes to where your money is really going.

Take a close look at your bank and credit card statements. Highlight key expenses and categorise them: essential bills, groceries, fun, transport, and so on. Add these all up to see how much you’re spending in each category.

While you’re doing this, you might notice some subscriptions or memberships you no longer use. Cancel them immediately and start saving! This small step alone could free up more money than you realise.

By tracking and categorising your spending, you’ll see if you’re living beyond your means. If your outgoings are higher than your income, you know it’s time to cut back on non-essentials or find ways to spend less. One of the simplest financial hacks is to spend less than you earn—it’s a surefire way to build savings and reduce debt.

Step 3: Set Realistic Financial Goals

Setting financial goals is one of the most powerful things you can do to keep yourself motivated. For us, setting SMART goals—Specific, Measurable, Achievable, Relevant, and Time-bound—was a game-changer.

Your goals will likely fall into three categories: short-term, mid-term, and long-term.

• Short-term goals (1–3 years): These might include building an emergency fund, paying down debt, or saving for a holiday.
• Mid-term goals (4–5 years): These are a bit bigger and may include goals like saving for a dream trip, a home renovation, or a significant life event.
• Long-term goals (5+ years): These usually involve saving for something major, like your child’s education or retirement.

When setting your goals, it’s important to be realistic. If your goals are too ambitious—like buying a private jet—they can become discouraging and lead you to give up. Instead, break large goals into smaller, manageable milestones. For example, if you’re saving for a deposit on a house, break that goal down into quarterly savings targets to keep yourself on track.

Every time you hit a milestone, celebrate! Seeing your progress, whether it’s debt decreasing or savings increasing, can be incredibly motivating.

Read more: Celebrate the small wins

Step 4: Create a Spending Plan

Once you’ve tracked your spending and set your goals, it’s time to create a plan for where your money will go.

Compare your fixed and variable expenses to your income. Your fixed expenses (such as rent, insurance, and utilities) are non-negotiable, while your variable expenses (like groceries, entertainment, and dining out) offer more flexibility.

To create a spending plan that works, start by setting realistic spending limits for each category. This means prioritising needs over wants. For example, petrol for commuting is essential, but a daily latte might be something you can cut back on.

Align your spending with your financial goals. If you’re saving for a big holiday or paying off debt, you might need to cut back on non-essentials. By adjusting your spending and allocating money towards your goals, you’ll be well on your way to financial success.

Step 5: Adjust Your Spending to Stay on Track

With your spending plan in place, it’s time to fine-tune it as needed. If you notice that you’re overspending in certain categories, look for ways to cut back.

Start with the “wants” in your budget. Maybe you can swap out expensive nights out for a movie night at home, or perhaps cancel a few subscription services you rarely use. Small adjustments like these can make a big difference over time.

Next, take a closer look at your regular bills. Could you get a better deal on your insurance or phone plan? Sometimes, even fixed expenses can be reduced if you shop around for better offers.

Finally, don’t underestimate the power of small savings. Even cutting back on minor expenses can add up to significant savings over time, freeing up more money to put towards your financial goals.

Step 6: Review Your Budget Monthly

Creating a budget isn’t a one-time task—it’s an ongoing process.

At the end of each month, review your budget and spending to see how you’re doing. Are you sticking to your plan? If you’ve overspent in certain areas, identify where you went wrong and adjust for the following month.

It’s also important to keep your budget flexible. Life happens—unexpected expenses come up, your income may change, or you might smash one of your financial goals and set a new one. Be prepared to tweak your budget as needed to stay on track.

Don’t expect perfection right away. It can take up to three months before you feel like you’ve really got the hang of budgeting. But don’t get disheartened—stick with it, because the payoff is worth it.

Step 7: Stay Accountable and Adapt

Your budget should be a living document that evolves as your life and financial situation change. Regularly review it, adjust as necessary, and stay accountable to your goals. If your income increases, use that extra money wisely by allocating it towards savings or debt repayment. If expenses rise unexpectedly, adjust your spending priorities to ensure you’re still on track.

By embracing the flexibility of your spending plan and making changes as needed, you’ll remain in control of your finances and continue to move towards your financial aspirations.

Final Thoughts

Creating an Intentional Spending Plan has been a game-changer for us. Before we started budgeting, we had no idea where our money was going. Now, we’re in control, and we’re able to make intentional decisions about our spending.

And the best part? I’ve taken what I’ve learned and now help others do the same! If we can get a handle on our finances, so can you.

Are you ready to crush your money goals and stop worrying about where your money is going? If so, leave a comment below or email me at hello@moneyandmarriage.net for a free consultation.