A client in Arizona called to thank me recently for teaching him how to create a Spending Plan, rather than a budget. He said that along with his wife, they got involved in sailing. Friends and neighbors were going sailing on lakes and invited them to come along, so they purchased a small sail boat and trailer, but then needed a vehicle that could haul it. Before they knew it, they were dipping into their reserves so much for this new hobby, they realized they would be broke in five years if they kept it up.
So they decided to re-examine their Spending Plan and were diligent in keeping track of all their expenses. This was when they realized they were headed for disaster. Emotionally they wanted to go with their wealthier friends and enjoy sailing on the lakes, but were forced to change that plan when they realized they just could not afford it.
At first it was hard not to be with their friends and doing fun things, but soon they were financially living within their retirement income and were able to relax. They learned a valuable lesson: Always keep a spending plan! And just as importantly, always track expenses against that plan. Don’t assume that because the last three years have gone well that you can slack off planning and tracking. The need to get back to the “drill,” to forecast, track, and compare goes on over and over again.
So whether you are young or old, working or retired, now is the time to build a Spending Plan and keep tracking it. The idea of planned spending and tracking is a time-proven, eternal financial principle that the wealthy have learned to put into practice. If you find yourself off base, start fresh with a new Spending Plan. It’s never too late to get on the right track.
A Spending Plan is Needed Today, Tomorrow and Forever

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