Meaningful Spending Plan: How to Budget by Looking Into the Future

Let's face it - traditional budgeting can feel like a drag. It's all about restrictions, penny-pinching, and looking back at your spending with regret. But what if I told you there's a way to manage your money that's actually exciting and forward-looking? Enter the Meaningful Spending Plan!

Why Traditional Budgets Often Fail

Most budgets fail for one simple reason: they're all about saying "no." No to that coffee you love, no to that weekend getaway, no to living your life. They focus entirely on cutting costs and ignore what truly matters - building a Rich and Meaningful Life.

This is a strategy I call "Meaningful Spending". Notice how we're talking about spending, not saving or investing.

The Meaningful Spending Plan: A New Approach

Instead of looking backwards and feeling guilty, the Meaningful Spending Plan helps you look towards the future and understand the life you want to live!

The Meaningful Spending Plan is here to give you clarity and get you excited about your financial future. It's NOT about restriction - it's about building positive spending habits and using our money with intention and purpose.

First things first, grab the Meaningful Spending Plan Template. Once you have that, we're ready to get started!

Step 1: Your Rich and Meaningful Life

Before we dive into numbers, take a moment to dream. When I coach individuals and couples one of the first questions I ask is "What do YOU actually want out of life?".

Maybe it's traveling the world, starting your own business, or having the freedom to pursue your passions without financial stress. Take a moment to reflect on what you actually want out of life.

Here's the thing... most people don't have a clear understanding of what they actually want. They're just living life, going through the motions.

This is exactly why I built a free mini-course called Design Your Rich and Meaningful Life. This free course will walk you through the process of designing your Rich and Meaningful Life and getting CRYSTAL CLEAR on the life you want to live!

Once you understand what you actually want in life you're ready to start building your Meaningful Spending Plan.

Here's how you can create your own Meaningful Spending Plan.

Step 2: Categorize Your Spending

Now, let's break down your spending into four main categories:

1. Fixed Expenses: These are the essentials (rent, utilities, groceries, etc).
2. Meaningful Expenses: These are things that bring you joy and align with your vision of a Rich and Meaningful Life. These could be restaurants, gym memberships, streaming subscription, you name it. These are the things that are not essential for you to survive but bring you joy in life.
3. Savings: Think of savings as buckets of cash you plan on spending in the future (emergency fund, home down payment, vacation fund, gifts, etc)
4. Investments: Assets that will grow your wealth long-term. Think stocks, cryptocurrency, gold, etc.

Fixed Expenses - The Essentials

Start by listing all your essential monthly expenses. This includes rent or mortgage payments, utilities, groceries, transportation costs, etc. Don't forget about insurance premiums and other recurring bills.

Pro tip: Once you've added all your fixed expenses add an item to the list called "Miscellaneous" that equals 15% to your total fixed expenses. Why? Life has a way of throwing surprises at us. This buffer will help you handle unexpected costs without derailing your entire plan.

Ideally, your fixed expenses should account for about 50-60% of your net income. Your fixed expenses could be a lot less but this leaves room for the fun stuff and building your future!

Meaningful Expenses - What Brings You Joy

This is the fun part and is where your Meaningful Spending Plan shines. Instead of feeling guilty for spending money, we're focusing on the things that bring us happiness. These are the things that align with your vision of a Rich and Meaningful Life.

Maybe it's a monthly massage, a subscription to your favorite streaming service, or regular date nights with your partner. 

The meaningful spending part can be tough though. It’s also those little things that continue to add up throughout the month. The Uber rides, an extra drink during happy hour, or order an appetizer at lunch.

It can be challenging to account for these things unless you live a very planned life. Take time to look at what you've been spending money on the past couple months and make sure to account for those things under your meaningful expenses.

Remember these are things that make your life richer and bring you joy. Try to allocate 20-30% of your income here.

This isn't about frivolous spending. It's about consciously choosing to invest in experiences and items that truly matter to you.

"But wait, aren't we supposed to cut out all unnecessary spending when budgeting?"

This is exactly where traditional budgets fail. They focus on restriction rather than intention. With a Meaningful Spending Plan, we're not banning fun or joy - we're prioritizing it!

By consciously deciding how much to allocate to each category, you're ensuring that your money supports the life you want to live. You're looking forward to the future you're building, not backward at every penny spent.

Savings - Your Short Term Goals

Savings are crucial for both peace of mind and achieving your shorter-term goals. I want you to think of savings as buckets of cash you plan on spending in the future.

Savings include:

• Your emergency fund (aim for 3-6 months of expenses)
• Short-term savings goals (like a new phone or a weekend getaway)
• Medium-term goals (perhaps a down payment on a car or a dream vacation)

Pro Tip: You can have as many saving buckets as you want. At times I've had between 10 - 20 saving buckets. Think of things like birthdays or holidays such as Christmas where you might need extra money for gifts and so on. Saving for these things in advance will enable you to contribute to those buckets each month so that when the time comes, you have the money ready!

Investments - Building Your Future

Here's where we're really looking to the future. I highly recommend allocating at least 10% of your income towards long-term wealth building.

This includes:

• Retirement accounts
• Index funds or other investment vehicles

If you want to learn more about investing, make sure to enroll in the free 5-Day Investing Challenge.

Step 3: Automating Your Money

At this point you have a pretty good idea of where you want your money to be going each month. Now it's time to make your life easier by introducing money automations!

Now that you've outlined your categories, it's time to decide how much of your take-home pay goes into each. Remember, this isn't about restriction - it's about intention.

Here's a starting point:

• 50-60% for Fixed Expenses
• 20-30% for Meaningful Expenses
• 10-15% for Savings
• At least 10% for Investments

But here's the thing - your life is unique, and your Meaningful Spending Plan should reflect that. These percentages aren't set in stone. If you need to adjust them, go for it! The goal is to create a plan that works for you and supports your vision of a Rich and Meaningful Life.

The Magic of Automation

Here's where we make your Meaningful Spending Plan effortless. Set up automatic transfers that split your paycheck as soon as it hits your account. This way, you're prioritizing what matters most without having to make tough decisions every month.

You can do this by automating contributions to your savings and investment accounts. Make sure that the automatic transfers you set-up happen the day or day after you get paid.

You only have to set this up once! This is the power of automation. You set it up and it will continue doing it's things automatically. By doing so you're ensuring that you stay on track towards living your Rich and Meaningful Life. It's like giving yourself the gift of financial peace of mind!

Remember, the power of your Meaningful Spending Plan lies in its simplicity and automation. You're not micromanaging every dollar - you're creating a system that aligns with your values and works for you in the background.

Step 4: Review and Adjust

Your Rich and Meaningful Life may evolve over time, and that's okay! Review your plan quarterly and make adjustments as needed. The goal is progress, not perfection.

The Power of Looking Forward

The beauty of the Meaningful Spending Plan is that it shifts your focus from past regrets to future possibilities. Instead of asking "Where did all my money go?", you'll be asking "How can my money help me live the life I want?"

By aligning your spending with your values and dreams, you're not just managing money - you're designing your ideal life. And that's something worth getting excited about!

Remember, this isn't about depriving yourself. It's about being intentional with your resources so you can live your richest, most meaningful life possible. So dream big, spend meaningfully, and watch as your ideal future becomes your reality!