Sarah Toffoli: Hi! I am Sarah with Wells Fargo & Company. Today we're discussing how to develop a spending plan that will help you reduce your spending and keep more money for yourself.

A spending plan will help you resist impulse buying, reduce spending and save more each month. Most people can't afford everything they want so they make trade-offs. Making trade-offs may mean giving up things or buying something less expensive so you can afford things that are valuable to you.

You should consider your needs and your budget before you buy a major item. Then you should research thoroughly and comparison-shop before making a purchase. This will help you find the best overall value for your item and always follow up if there is a problem.

There are three types of expenses that everyone has; fixed, flexible and discretionary. Fixed expenses are regular amounts that generally don't change much such as monthly expenses like rent or car payments and other bills that you receive less often like car registration or insurance.

Flexible expenses occur on a regular basis and are also for necessities, but you have more control how much you spend. For example you can control how much you spend on groceries or how many long-distance phone calls you make in a month.

Finally, a discretionary expense is money you choose to spend but don't necessarily have to spend. These can include clothes, movies and dining out.

After writing your spending plan you may find that there's not enough money to go around. Fixed expenses may be difficult to change so look for ways to decrease your flexible and discretionary expenses.

You should do some price comparison on your flexible expenses and look for savings there such as comparison-shopping for your auto or home insurance policy before it renews.

But most of your savings can come from discretionary expenses such as saving on dining out, entertainment, cell phone charges and more.