Regardless of the amount of money people have to spend, they should always create a plan. The plan should include three spending categories: needs, wants, and savings. Along with your everyday spending, it is important to include savings for rainy days.

Cash flow planning is used by accountants in order to optimize cash flow. The objective is to pay all debts when due, and use surpluses to buy items for cash. Although some credit buying is necessary, consumers should plan their purchases in order to keep interest and other charges at a minimum.

Needs Cash Flow Plan:

Responsible spenders plan for their needs before their wants and entertainment. They know that if money is tight at the end of the month, they will have something to eat and a place to sleep. Therefore, wise spenders develop a cash flow plan.

Developing a Cash Flow Plan:

Cash flow plans are developed by using an electronic spreadsheet or a columnar pad. It is the process of adding each month’s income to the beginning cash balance and subtracting each month’s expenses. The result is the beginning balance for the following month.

Planning for responsible summer spending begins with the cash balance on June 1, add June’s income, subtract June’s expenses and the remainder is the cash balance for July. The process is repeated for the following months.

Planning must include all expenses such as rent, utilities, groceries and all other cash payments that are due during this period. Be sure to include taxes, insurance and other extraordinary payments.

Wants Cash Flow Plan:

Wants may be defined as things that people desire, but things they don’t need. These items should be purchased only when sufficient cash or credit is available after all needs are met. Planners who have completed their cash flow plan for needs can quickly determine the amount available for wants. However, planners should keep in mind that the money they spend on wants will not be available for entertainment.

Items included in the wants category may be computers, electronics, televisions and things they’ve always wanted, but couldn’t afford. Planners may distribute the entertainment amount in any manner desired. Vacations, short trips, baseball games and other entertainment forms must fit the planner’s budget. The objective is to end the summer debt free.

Developing the Wants Cash Flow Plan:

Record the August 31 balance from the needs worksheet in the June column. List the cost of the wanted items in the month to be purchased. Begin by subtracting the item cost from the June balance and carry the figures forward as was done in the needs cash flow. The August 31 balance is the amount available for entertainment

Spending Strategies:

After creating a plan, responsible spenders can easily see which items can be purchased. Many will be able to supply all of their needs, wants and entertainment. Others may struggle to supply their needs. However, applying the following strategies will help every planner to improve his or her purchasing power.

Planning Shopping Trips:

People who plan their shopping trips buy more for less. Since they are responsible spenders, they avoid impulse buying, and follow guidelines to get the most from their shopping dollars.

Alert shoppers look for sales so that they can take advantage of the best bargains. They also take inventory of their stock and replenish those items at sale prices. Alert seniors learn which days their favorite store offers senior discounts. They arrange their shopping schedule to take advantage of their discount. Smart shoppers know that a manufacturer’s coupon is as valuable as the money in their pockets, and they know when they can double their money.

Travel Expense:

The best shoppers plan their shopping trips in order to accomplish all of their shopping in one trip. Travel costs also add to the cost of purchases. Shoppers can find coupons in Sunday newspapers or magazines.

Many coupons and promotion codes are available online. A Google search for a specific product coupon will yield several choices. In addition, online shoppers may find huge promotion code discounts for online businesses. Best of all, shoppers can find coupons online that duplicate coupons found in newspapers.

Credit Cards:

Credit cards offer many benefits to shoppers. Regardless of the card, users can accumulate points or dollars and redeem them for various rewards. Some cards offer 5 percent for gas, 5 percent for groceries and 5 percent for various other purchases. Shoppers should find the best card for their needs and use it wisely.

When shoppers analyze cash flows, they may notice that an extraordinary payment occurs in July. This payment may result in a negative cash flow, and the shopper may find that credit is the perfect solution.

Many card issuers allow 5 to 20 percent cash back when shopping online. Shoppers go through the card issuer’s website and onto the online business. The credit card is charged the full price of the order, but the discount is credited to the card holder’s account in a few days.

In addition, many online businesses do not charge state sales taxes.


Responsible spending, this summer, requires planning and self-discipline. Cash flow plans for needs, wants and entertainment show shoppers their ability to buy the items they need and want. The responsible shoppers will analyze their situation and optimize their spending.

Shoppers can stretch their dollars by using coupons, promotion codes and credit. Online shopping offers many advantages to those who want to stretch their dollars.

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