Money Mapping (Budgeting)
A money map is your most important tool for controlling your finances. It’s your plan for saving and spending money. It’s a good idea to make a money map for each month of the year.
In Activities 4 through 9 you figured out what your income and spending looked like for one month and created a “Personal Statement of Income and Spending.” (In our example, we used September.)
To make a money map, simply copy your “Personal Statement of Income and Spending” (Activity 9) and make a few adjustments that reflect your plan to use surplus monies or address a deficit in the next month. (In our example, it will be October.) Here’s how:
Each month after you have recorded your spending in the “Actual Spending” column, you can then start the next month’s “Planned Spending” column with those numbers. You should make adjustments to your plan for the next month to account for extra money or shortfalls.
It’s very important that you not simply copy your actual spending from the month before without addressing what you really want to do with your cash flow.
The easiest way to understand how this works is to look at the examples below.
| EXAMPLE: My Personal Money Map for OCTOBER | ||
| Step 1: Needs | ||
| Description | Planned Spending | Actual Spending |
| 1. Personal care items from drug store | $7.65 | |
| 2. Groceries from supermarket | $160.00 | |
| 3. Doctor visit co-pay | $25.00 | |
| 4. Rent | $400.00 | |
| 5. Utilities | $74.00 | |
| 6. Telephone | $20.00 | |
| 7. Student loan payment | $50.00 | |
| Step 2: Total Needs | $736.65 | |
| Step 3: Wants | ||
| Description | Planned Spending | Actual Spending |
| $45.00 | ||
| Meals eaten out | $9.20 | |
| Concert tickets | $50.00 | |
| DVDs | $26.50 | |
| Step 4: Total Wants | $130.70 | |
| Step 5: Expenses (Total Needs + Total Wants) | $867.35 | |
| Step 6: Total Monthly Income | $950.00 | |
| Step 7: Cash Flow (Income – Expenses) $950.00 – $867.35 = $82.65 | $82.65 | |
Notice under “Step 3: Wants,” there is no planned spending for Mom’s birthday gift because her birthday happened in September. There is, however, planned spending for Halloween party supplies because that will happen in October.
At the end of the month, record your actual spending for each of the items in your money map. Our next example now shows a completed money map.
| EXAMPLE: My Personal Money Map for OCTOBER | ||
| Step 1: Needs | ||
| Description | Planned Spending | Actual Spending |
| 1. Personal care items from drug store | $7.65 | $0 |
| 2. Groceries from supermarket | $160.00 | $150.00 |
| 3. Doctor visit co-pay | $25.00 | $25.00 |
| 4. Rent | $400.00 | $400.00 |
| 5. Utilities | $74.00 | $74.00 |
| 6. Telephone | $20.00 | $30.00 |
| 7. Student loan payment | $50.00 | $50.00 |
| 8. Car repair | $0 | $100.00 |
| Step 2: Total Needs | $736.65 | $829.00 |
| Step 3: Wants | ||
| Description | Planned Spending | Actual Spending |
| $45.00 | $0 | |
| Meals eaten out | $9.20 | $20.00 |
| Concert tickets | $50.00 | $30.50 |
| DVDs | $26.50 | $0 |
| Step 4: Total Wants | $130.70 | $50.50 |
| Step 5: Expenses (Total Needs + Total Wants) | $867.35 | $879.50 |
| Step 6: Total Monthly Income | $950.00 | $950.00 |
| Step 7: Cash Flow (Income – Expenses) $950.00 – $879.50 = $82.65 | $82.65 | $70.50 |
Notice that spending for some items in this example changed from what was planned to what was actually spent. There was nothing spent on DVDs or on the Halloween party supplies. The actual phone was higher than planned. There was an unplanned car repair. Income stayed the same. Fortunately, total spending for needs and wants was still less than income.
