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Budgeting – what a dreadful word! It dredges up uncomfortable images of cutting back, restricting, penny-pinching, and doing without. It’s incredible the power of that one little word. It says “Here come the papers and pencils and calculators and spreadsheets…” My head starts to hurt as I write it. Dictionary.com defines budget as “an estimate, often itemized, of expected income and expense for a given period in the future.” That’s pretty cold and clinical and hardly helps to alleviate the stress the word can cause. Actually, I’m a huge fan of the budgeting process. I just don’t use that awful word. I prefer the term “Spending Plan.” Let that phrase sit with you a moment. A lot less threatening, huh? A spending plan is simply that – a plan for how you will spend your money every month. Plans are not ironclad; they recognize that things can, and often will, change. However, you have to have one if you want to keep your finances healthy. As with many other things in life, planning ahead has many benefits. Let’s say you’re going on a trip. Do you jump in the car and just start driving? Going over your route beforehand will prevent you from getting lost, or perhaps get your to your destination faster or more safely. Or, you want to eat healthier. Do you just start eating what you have in your cupboards? Probably not – you likely do some research into healthy foods, visit your supermarket, join a group or subscribe to some sort of meal plan (notice I didn’t say diet – for the same reason I avoid budget, it’s scary!) The goal of a spending plan is to decide where you want your hard-earned dollars to go. You decide what’s important, you take steps to ensure you have the money for those important things – vacations, owning a home, fun family purchases from TVs to snowmobiles. Having a plan means you are not flying by the seat of your pants from paycheque to paycheque, watching all of your income go towards more mundane expenses like power, phone, cable, Internet, groceries, or gas. I try to keep spending plans simple, for myself and for my clients. For example, In my blog The 3-Step Simple Spending Plan, I break it down into three easy categories:

• Bills and Automatic payments;
• Savings and occasional expenses and;
• Spending.

Dividing your money into these three categories can make a spending plan simple and effective and forgo the need for spreadsheets, ledgers and the like. There is no cookie-cutter plan, no one-size fits all solution, and you need to discover what works for your particular circumstances. But what’s really important is to get that spending plan in place! It’s the absolutely essential first step to getting financially healthy. Mary Ann Marriott, CIRP, is a Licensed Trustee with Allan Marshall & Associates Inc.. and services their Halifax and Bridgewater locations in Nova Scotia. She is passionate about helping others succeed financially and regularly provides workshops, presentations and social media posts on this topic. You can find her on Twitter as @Dr_Debt_NS.