You may know about planned spending but for me, it's something that I recently added to my 'budget' this year. I roughly knew it was something that I had to do but when you're just sorting out expenses, I couldn't think ahead about this. Plus I am one of those people who hate thinking ahead cuz it takes too much effort and one cannot just tell what's going to happen. Plan and then things go totally the opposite direction. But I am wiser now *grins* Things may not go as planned yes, but at least there should be some secret stash somewhere for such occasions. But when you only have enough for necessities and the rest go to paying off bills, this can be truly a challenge.
What I try to do now as I plan for the following month is try and think ahead of any expenses that I may need for the following month. Is there a birthday coming up? Or a girls' nite out? A house-warming party to attend? These are what I refer to as the 'smaller' expenses. Bigger expenses would be a work trip or vacation that should be planned for months ahead so that you have time to put aside money that you will need for the trip.
Back to my monthly planned spending, once I figure out what expenses I may have to indulge in, I put a number next to that and add up all the numbers to see if it balances with my income. I also make sure I have a 'contingency' amount or secret stash in case of things cropping up unexpectedly. Unfortunately, right now the contingency amount is not very much and hopefully nothing too major occurs that will require me to dip into my savings, which is meant for emergencies only.
There is also another form of planned spending called Periodic Expenses. There are basically three times of expenses (you probably could come up with more but three's good for me) - Fixed Expenses (which are bills that I absolutely have to pay), Variable Expenses (which may vary with the month so this could be my credit card bills for example) and last is the Periodic Expenses which comes about at certain times of the year, for example, taxes or insurance (would Christmas expenses come under this too? *grins*) etc.
I have included the first two in my budget but for 2009, I have also included the Periodic Expenses so that I can split the amount and put aside the amount monthly so that when the time comes, I would have it. For example, I have to pay my insurance agent $3634 for my Critical Illness Insurance Plan in August, so from January to August, I split the amount by 7 (not 8 because I would like to have the amount before August) and put aside in one of my multiple savings account $520 monthly. So come August, I will have the amount needed and I won't not have to go back to old practices where I would draw out from my credit card the amount I need or bank on a bonus that's suppose to come in in July (and I would be praying that the bonus WILL come in) and pay for that.
Doing this also means major adjusting of my budget. I would have to put aside more each month for these periodic expenses but it means having to cut down on my variable expenses and even having to prioritise some of my variable expenses. It's tighter these days but I know this is how it should be. Recently I had to pay for the Renewal Road Tax for my car and thanks to this new practice, I actually had budgetted for this under my Car Expenses and I didn't have to use my credit card or dip into my savings.
So a good start would be to think of what are the periodic expenses that you have. And list out the amount and when you need to pay up and add it into your budget. Also don't forget about the planned spending too so that you're covered each month. Using the credit card is NOT an option especially when you need to get out of debt!! Give it a try and work it out so that it works for you. Good luck you!
PS: If like me you hate doing sums, what I do is a got myself a super cute calculator so that at least when I do the budgetting, it's alot more fun with cute gadgets like that *laughs* It doesn't have to be expensive mind you!