Controlling your spending is a skill that takes practice and discipline.
What’s Your Style? Link
Different people have different relationships with money. Some are natural savers with more money left at the end of the month. Others are spenders with more month left at the end of the money. If you haven’t yet, spend thirty days recording your spending activity and determine your style. Keep a log, journal, or notes on your phone on what you’re spending every day and what you’re buying. Tracking your expenses will help with your next step.
Every Dollar On a Mission Link
You’ve probablyheard people say to live on less than you make. Once you knowyour expenses, use a free budgeting tool like the Orange Budgetto record your income and plan your spending for the upcoming month. Assign a task to every dollar you earn. Budget to save money, but be sure to set fundsaside for entertainment, shopping, and othermiscellaneous items. When every cent has a predetermined destination and income minus spendequals zero, you have created a zero-balance budget; this is thegoal. Follow the budget instructions for more assistance.
Banking Basics Link
Choosing a bank or credit union is an important step in establishing your financial foundation.When choosing a bank, consider the following:
- Convenience– It is generally easiest to workwith abank or credit union that is close to where youlive or work, as a physical location is more convenient when making transactions. As you shop for banks or credit unions, ask yourself:
- How is the customer service?
- What are the hours and accessibility policies?
- Do I prefer to write checks or pay most bills online?
- Do I prefer to use an app or talk to someone in person?
- Cost – Avoid fees on your accounts. Common chargesinclude ATM fees for withdrawing cash at an ATM not associated withyour bank, overdraft fees, and monthly maintenance fees. Take note ofyour bank or credit union’s fee schedule as it outlines of the different fees and costs. Many banks have accounts that do not cost any money to use solong as you maintain a positive balance. Others can charge fees for service that canadd up over time. Besure tounderstand what costs are associated with your accountsbefore you sign up.
- Legitimacy – You willwant to make sure whatever institution you choose is insured by the FDIC (Federal Deposit Insurance Corporation) for banks, or the NCUA (National Credit Union Administration) for Credit Unions. Use FDIC BankFindor the NCUA Credit Union Finder to explore options in your area.
Once established, most of your daily transactions will go through a basic checking account, but you can useother accounts for emergency savings and saving for larger purchases, like a basic savings account or money market account. Ask questions, and don’tput your money into any account that you don’t fully understand.Explore more information on banks vs. credit unions.
Resources Link
- Banking Basics – Find answers and solutions to all of your bank account questions.
- Credit Cards vs. Debit Cards – Get to know the difference between the two to develop your spending strategy.
- Orange Budget – Download this free tool to start budgeting today.
- Federal Trade Commission Budget – The FTC’sfree budgeting worksheet to help make your plan.
- Mint – A popular online budgeting tool.
- Every Dollar – Another popular online budgeting tool.
