Spending PlanOne of the most common topics I’ve encountered while promoting financial literacy as CEO of Pay Your Family First is spending management. Many people focus on earnings without figuring out how and when they are going to distribute (spend) that money. They understand that to be successful, you should keep debts in check and save for the future—they simply don’t know how to make it happen. Everyone spends money. Having a spending plan allows us to be intentional about spending and provides a roadmap to financial goals.

According to a recent survey conducted by the American Institute of CPAs and the Ad Council, millennials aren’t even fully aware of their situation. Saving money was their #1 priority for the year, yet 40% of those surveyed had less than $100 in their checking accounts. This disconnect illustrates how young adults have the drive to manage their spending, even if the reality of not being able to afford daily $7 lattes and designer jeans hasn’t sunk in.

Luckily, there are plenty of modern tools available to make money management easier. By creating an annual spending plan, millennials and beyond can work toward future financial goals while completing daily, weekly and monthly micro-movements designed to improve overall financial health. Here’s how to get started:

Choose Your Weapon

First, you’ll need to figure out how you want to track your spending. A ton of online trackers such as Mint and EveryDollar are available to help get your money organized. Or, maybe you prefer the hands-on approach of a good old-fashioned pen and paper planner. Select a method that makes sense with your lifestyle; for example, a mobile app if you’re constantly on the move.

If you’re tracking spending and income through a physical planning tool, I highly recommend customizing a ring binder with monthly calendars, debt tracking spreadsheets, annual expense sheets, and monthly budget planner pages. This way, you can add or remove sheets as needed. With Father’s Day coming up, this makes a great personalized gift idea. Alternatively, working on your own finances is a reward for Dad, especially if you’ve borrowed from family to pay bills.

Line up at the Start

The first step to creating a spending plan (budgeting) is determining your income. That’s easy for standard workers who can pull up a pay stub, and a bit harder for self-employed entrepreneurs, seasonal workers and business owners. Remember that your income includes other earning sources such as royalties or dividends, alimony and freelance or one-off jobs.

Track Your Spending

Before you go through all the work of creating the perfect color-coded spending spreadsheet, take a month to track expenditures. Include monthly bills as well as non-essentials and splurge items. Tip: Jot down each purchase or payment in a spreadsheet or lined page, organized in columns by type of expenditure (living essentials, non-essential bills such as pool service and Internet, restaurants and other splurges). Tally up the columns at the end of the month.

Plan, Plan, Plan

In real estate, it’s all about location. With personal finance, planning is key. Here’s where you’ll determine what kind of plan you want to put into action. How much are you spending? How much do you want to save? Many millennials follow the classic 50/30/20 rule, where half of your earnings are devoted to living expenses including food. The other amounts are for less crucial items like cellphones and cable (though I’m sure some Millennials would argue HBO is a necessity), and savings goals. You can also factor in single purchases for a particular month, such as a Father’s Day gift in June. Other options include a fixed vs. variable plan, which offers more flexibility, and zero-sum budgets that work well for independent contractors.

From there, you can adjust and add to your spreadsheet as needed. For example, some people choose to separate their short- and long-term savings goals. Others include discretionary budgets for clothing and massages. Choose what works for you, and most importantly what the numbers say you can afford. With the help of a spending spreadsheet, anyone can keep their personal finances on track.