Fast Fact

$17.5 billion
The amount consumers are paying in overdraft fees each year.

Source: Center for Responsible Lending

How to Budget

It's a lot easier to budget when you have actual money to budget with. Take this simple approach to help keep a little more in your wallet.

Step 1. Assess your financial situation.

Track how the money comes in and how it goes out.

Common Ways Money Comes In Common Ways Money Goes Out
  • Your paycheck
  • Family and friends
  • Savings
  • Other (alimony, child support, etc.)
  • Rent or mortgage
  • Food
  • Utilities
  • Clothing
  • Transportation
  • Insurance
  • Student loan payments
  • Other debts
  • Miscellaneous expenses
  • Savings

Step 2. Identify needs vs. wants.

Take a look at what you have or want and determine what you can't live without. As hard as it is, you may need to give some things up.

Needs Wants
  • Food
  • Clothing
  • Shelter
  • Medical/dental visits
  • Prescriptions
  • Computer, internet
  • Car
  • Cell phone, smart phone
  • Cable television
  • Movies, entertainment
  • Pets

Step 3. Understand your financial behaviors.

Only by identifying your spending habits can you find budgeting strategies that work for you.

Financial Behavior Budgeting Strategy
  • Impulse buying
  • Buying name-brand
  • Not knowing where the money goes
  • Spending your entire paycheck
  • Put yourself on an allowance
  • Buy generic or previously owned
  • Keep track of your spending
  • Use direct deposit to save

Step 4. Create your budget.

Creating a budget is nothing more than simple math. Once you deduct your expenses from your income, you'll know how much you have left to spend on your "wants."

Monthly income

– 30% of monthly income (for taxes and other deductions)
– Monthly expenses (including savings)


= Spending money

Helpful Tips

Calculators

Online Resources