Are you on a budget? If you're not, do you think you should be? A budget, or a spending plan, is something that can help you control your spending and start saving your money. Watch our Personal Finance 120 video about developing a spending plan to learn how to track your spending and start living a more financially free lifestyle!

Transcription: I am Carly Cherry and welcome to personal finance 120, information for managing your financial life in less than two minutes. Today, we're going to be discussing how you can develop your own spending plan. A spending plan is another way to say budget. Unfortunately, some people think budgeting sounds restrictive, this couldn't be further from the truth. By developing a spending plan, you’re preserving your way of life, not restricting it. The first step to creating a spending plan is to calculate your monthly expenses. The best way to do this is to write down what you're spending each and every day for a month. This list should include every single thing you spend money on. Once you have an idea of how much you're spending, it's time to look at what you actually have available to spend. List all income sources including full-time, part-time, and side jobs. Are you making less per month than you're spending? If so, it's time to alter your spending habits and come up with a better plan. If you're watching more money leave your account at the end of each month than you can afford, it's time to cut down on some of your expenses. Take a long look at your list of purchases over the month that you recorded. Is there anything you can do without? Is there a bill that would decrease if you alter the plan you’re on? Whatever you do, it's important to have money left over at the end of every month in addition to long-term savings goals such as retirement. It’s vital that you have money left over every month to put in savings. Your goal should be to have a minimum 10 months’ worth of your expenses saved in case a crisis occurs that would eliminate your income. Pick a scenario, whether the loss of your job, access to overtime pay, or the death of a spouse. Then, create a budget to suit those changed circumstances. you'll need to review expenses of course, and you may need to do some homework about what an insurance policy would payout, how much you'd get for selling your car, or how much you'd get for selling your spouse's car. There’s a lot more work involved in creating a crisis budget, but prioritizing debts in advance of a crisis can get you through one when it hits. That’s all we have for today, we hope you take some time and start to develop your own spending plan and get on track to a more financially free lifestyle. Once you developed your spending plan, try pairing in down even more to only the essentials and see how well you would do if you suffered a loss of income. Don’t forget to check us out on social media for more videos, articles, and tips to help you with your financial needs. Until next time, I’m Carly Cherry for Cambridge Credit Counseling.