What is meant by a "spending plan"?

A spending plan refers to a structured approach for managing one's income and expenses, and it is indeed synonymous with a budget. This means that it outlines how much money a person expects to earn and how those earnings will be allocated towards various expenses, both fixed and variable, along with savings goals. A spending plan helps individuals prioritize their financial obligations, avoid overspending, and ensure that they are directing their funds towards their most important needs and goals.

Being a form of budget, a spending plan emphasizes not just tracking expenses but planning for future expenditures, regular savings, and investments. It is a forward-looking tool that enables better control over personal finances. By comparing the planned spending against actual spending, individuals can adjust as needed, making it an essential aspect of sound financial management.