woman in white shirt showing frustration

Creating a Five-year Spending Plan

The problem

Being rich is something that society tells us will make us happy and we all want to be happy, right? Unfortunately, having a lot of money doesn’t always equal living happily ever after. Living within your means though can make for peace of mind. I don’t think that money is the answer to all our problems, but not having to worry about how to make ends meet can make life a lot less stressful. And stress is a global problem that affects so many people and one which we could all do with a lot less of.

The trouble is that money management and budgeting has had a bad press. As something only done by those struggling to pay their bills.  Get a well-paid job and you’ll be fine. That’s what we’re told. Unfortunately, unless you know what to do with the money coming in every month, then it’s likely to go out of your bank account even quicker than it arrived.

black payment terminal
Pay now and worry later – is that your current strategy?
Think budgeting isn’t your thing? Think again

Perhaps the thought of ‘having a budget’ sends shivers down your spine and sounds extremely boring. In my opinion the exact opposite is true. When you know that you can afford something you can spend money ‘guilt-free’ rather than just flashing the plastic now and worrying about it next month.

Perhaps you might be worried about looking closely at your numbers. You’ve always managed in the past and if there’s been a problem you’ve just tried to ignore it, hoping it will go away. But that doesn’t always work does it? It’s a bit like that small lump you find, that may or may not be something to worry about. You could just ignore it and over time it might just sit there or it might go away. Alternatively it might get a whole lot bigger. So big you can’t ignore it anymore and when you do eventually seek some advice the only option is drastic surgery or worse.

person holding black desk calculator
Planning your spending makes life run more smoothly
How about a spending plan?

If you aren’t a fan of the word budget, then how about ‘a spending plan’. It’s a term I’ve used heard a lot recently, maybe as a way of avoiding talking about living on a budget. Budgeting is often spoken about in frugal circles – living on a budget or we’re on a tight budget. The truth is the word budget has several meanings e.g. ‘an estimate of income and expenditure for a set period of time’ or it can mean ‘inexpensive’. In my mind a budget is just the amount of money you have and how you’re going to spend it, whether your salary is £15,000 or £150,000.

So if you’ve never quite managed to get a grip on your financial situation then stick around as in November we’re going back to basics. I’m going to walk you through the steps so that you can start to get to grips with your financial situation and become a master of your money. As you know, my focus here on ‘A Simple Life’ is about creating your future, so I’m going to help you write a spending plan to take you through the next five years. By the end of it you will have a road map to take you from where you are now to where you want to be in five years’ time, which if you’re like me may be a ‘Work Optional’ Life.





November 21, 2021 at 10:47 pm

Hi Sam

This is Brilliant!
What a great series!

I have been thinking a lot about Budgets vs Tracking Spending lately. I have come to the conclusion that tracking spending is better than Budgeting per se.
In fact even better when books like ‘The Barefoot Investor’ tell us how we should divvy up our income in to different pots by %. Thats all good and well, but if you don’t know what you are actually expensive, yo wont know what changes to make to your spending habits in order to get ahead.

I am looking forward to reading the next posts in the series !


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