Budget vs Spending Plan and Why I Need Both


budgeting, spending, money tips

My wife and I agreed to let our son travel with friends ninety minutes to a major metropolitan area to go to his first concert. A few days later, after I found out he had purchased his ticket, I asked if he was setting aside money for the things he’ll need on concert night. He wouldn’t get paid again before the concert and I wanted to make sure he was thinking ahead. The look on his face in response to my question told me he wasn’t.

I explained to him that even though he had purchased his ticket, there would be other things he would need money for that night:

  • Gas : His friend was driving, but it would be nice to at least offer gas money.
  • Parking : I suggested he and his friend should split the parking expense in half.
  • Food : They were planning on leaving right after school, so they would likely be hungry before the concert.
  • Soda : During or after a concert he would get thirsty at some point.
  • Souvenir : Was he thinking of buying a T-shirt or any kind of memento from the concert?

It was time I introduced him to what I call a spending plan.   There are countless interpretations of what a budget or a spending plan is. Here are my definitions:


My budget tracks income against itemized required bills for a budget cycle. For each two week budget cycle I create a worksheet that shows our income, as well as every bill that has to be paid as well as life necessities such as food and gasoline. The money spent here is non-negotiable. What’s left over is discretionary spending.

Spending Plan

Once we have everything required to meet our financial obligations taken care of, it’s time to discuss what we’re going to use with our discretionary funds. We have spending plan meetings once a week to discuss what activities we have going on, if there’s anything we want to purchase, or if we want to have a date night.

My wife and I have been breaking our finances into two pieces for a couple of years now. By doing so, we ensure first and foremost the bills get paid. Through our spending plan discussions we force ourselves to really think about how we want to spend our discretionary funds from week to week. This process results in having almost every dollar accounted for, keeping our finances 100% on track.

Do you account for every dollar of your income? How often do you have financial discussions with your significant other?

About the author

Brock Kernin


  • That was good he learned this lesson while still young. Idle Money needs a plan or else it will get spent in non-beneficial places. I think we talk about finances 1 a month or when a big ticket item needs to get planned for like vacations.

  • @EL, sounds like you have a good, open channel of communication regarding your finances. I like to talk a bit more often – but everybody has to find their own pace that works for them. Thanks for reading, EL!

  • Trying to account for every dollar was driving me crazy. Things like health problems make for a lot of unexpected expenses. Not just co-pays, but also things like picking up fast food on the way home because you know you can’t handle the food issue later in the day. Or needing new clothes when a medication makes you gain weight. Or… yeah.

    So I transfer a set amount into the main account each week. We have to make that last 7 days. And we have budgeted for other expenses, like medications and such.

    The rest is allocated into various sub-accounts for various saving goals.

  • @Abigail – I need to be a bit more specific, BUT I will say that entertainment expenditures tend to get “traded” from one activity to a different one often on the weekends. 🙂 Whatever works for you…..as long as it keeps you on point!

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