![\"\"](\"http:\/\/firstexbank.wpengine.com\/wp-content\/uploads\/2023\/10\/First-Exchange-Bank-How-to-Create-A-Budget-Blog-Images-1.jpg\")
<\/p>\nHow do you feel about budgeting? Some people seem to be born with a budget in hand, while others struggle to create and stick to a budget. Whether it comes naturally or not, it\u2019s worth the effort to try different methods until you find one that works for you. Developing a budgeting habit can help you gain control over your spending, improve peace of mind, and stay on track to meet your long-term financial goals. Keep reading to learn how to start a budget today!<\/p>\n
While some people think of a budget as a restrictive device\u2013a financial cage, so to speak\u2013a good budget should be more like a roadmap. Budgeting sets your course while still leaving room for impromptu stops and other detours.<\/p>\n
Non-metaphorically speaking, a budget can be a list on paper, a spreadsheet, or a digital app. With so many budgeting methods out there, you may have to try several before finding the best one for you. Don\u2019t get discouraged if you have a few false starts. Like any new habit, it can take time for budgeting to stick.<\/p>\n
In its simplest form, the best budget should list your monthly take-home pay, all monthly bills, and essential expenses such as groceries. You can also budget one week or one pay period at a time. Subtract total bills and expenses from total income and then comes the fun part\u2013deciding what to do with the remaining money available.<\/p>\n
<\/p>\n
Before you create a budget, it may be helpful to reflect on the reasons why you need a budget. Are you budgeting your money for a specific reason, such as to reach a savings or debt payoff goal? Are you tired of running out of money before you get paid again? Budgeting will give you a clear-eyed picture of where your money actually goes (all of us tend to underestimate the amount we spend on things like dining out, hobbies, clothing, and more). Once you know what you\u2019re spending on, you can make the changes needed to align your spending with your goals.<\/p>\n
<\/p>\n
As we\u2019ve said, setting up a budget gives you an understanding of your financial situation including your income, expenses, debt, and savings goals. Follow these steps to set up a budget that works for you.<\/p>\n
![\"\"](\"http:\/\/firstexbank.wpengine.com\/wp-content\/uploads\/2023\/10\/How-to-Create-A-Budget-Blog-Images-2.jpg\")
<\/p>\n
Create spending categories and list your bills, expenses, and discretionary spending. It may help to review last month\u2019s bank statement to see exactly where your money went.<\/p>\n
Hopefully your income is higher than your expenses, with a comfortable margin leftover to allocate toward savings, extra debt payments, and discretionary spending. If not, you\u2019ll need to do what you can to cut unnecessary expenses.<\/p>\n
While certain kinds of debt, such as a home mortgage, can be necessary and helpful, most other kinds of debt can drag down your budget. Essentially debt, especially credit card debt, is a claim on your future income. Just think about what you could do with that extra money in your budget if you didn\u2019t have a student loan payment, credit card payment, or other type of debt payment anymore.<\/p>\n
Feeling motivated to vanquish your debt? Take stock of how much you owe by listing each debt account, the current balance, and interest rate.<\/p>\n
Next, choose a strategy for\u00a0paying off your debt.<\/a>\u00a0For example, the snowball method of debt payoff means starting with the lowest balance and throwing as much money as you can at it each month while making minimum payments on everything else. Then you\u2019d move on to your next-lowest balance and so on.<\/p>\n Alternatively, the avalanche method of debt payoff means starting with the account with the highest interest rate, regardless of balance. Some people want a faster win from starting with the lower balance, while others want to save as much money as possible on interest paid.<\/p>\n If you have a lot of debt and it seems difficult to manage, you may want to consider a\u00a0debt consolidation loan<\/a>\u00a0to make your life easier. Consolidating multiple debt accounts with one new loan, usually at a lower interest rate, means just one monthly debt payment and can help debt fit into your budget better.<\/p>\n As the saying goes, \u201cpay yourself first.\u201d Savings should be a line item in your budget, whether you have a particular savings goal such as buying a house, building an emergency fund, or growing a nest egg for retirement.<\/p>\n Individual savings goals will vary, but everyone should contribute to an emergency fund and a retirement account such as a 401(k) or IRA. The easiest way to save is to automate. For example, you can schedule recurring transfers between your First Exchange\u00a0checking<\/a>\u00a0and\u00a0savings accounts.<\/a>\u00a0We also offer\u00a0Roth and Traditional IRAs<\/a>. If your employer offers a 401(k), you can schedule automatic contributions from your pre-tax paycheck. Find out if your employer will also match up to a certain percentage of your contributions.<\/p>\n Another way First Exchange Bank can help you with your savings goals is with\u00a0Round Up<\/a>. Round Up from First Exchange Bank allows debit cardholders to round up every point-of-sale transaction to the next dollar (or dollar increment), and deposit the extra amount to your First Exchange Bank savings account that is linked to your debit card.<\/p>\n <\/p>\n Once you\u2019ve allocated the appropriate amount of money towards your fixed bills and expenses, decide how you want to divvy up the rest. This could consist of extra debt payments, savings contributions, \u201cfun money,\u201d and more.<\/p>\n If you want a formula to follow, a common rule of thumb is the 60\/20\/20 guide. This consists of:<\/p>\n Of course, your budget doesn\u2019t have to follow the 60\/20\/20 rule or any other rule. Find a breakdown that works for you, in whatever stage of life you current find yourself in. For example, parents of young children may need to devote a significant amount of their budget to childcare, diapers, and other related expenses. The bottom line is that there are many approaches to budgeting out there, but they all boil down to balancing needs vs. wants. Use whatever works for you and remember that your budget isn\u2019t carved in stone. It can and should be adjusted as needed to reflect your reality.\u00a0Give your finances a yearly checkup<\/a>\u00a0and keep or adjust your budget accordingly.<\/p>\n <\/p>\n First Exchange is here to help you create a budget that works for you.\u00a0Open a new checking or savings account online<\/a>\u00a0or visit any of our\u00a0bank branch locations<\/a>\u00a0in North Central West Virginia including Mannington, Morgantown, Hundred, Fairview, Fairmont, White Hall.\u00a0Enroll in online and mobile banking<\/a>\u00a0to easily keep track of your accounts on the go and link them to the budgeting app of your choice.<\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" How do you feel about budgeting? Some people seem to be born with a budget in hand, while others struggle to create and stick to a budget. Whether it comes naturally or not, it\u2019s worth the effort to try different methods until you find one that works for you. Developing a budgeting habit can help […]<\/p>\n","protected":false},"author":1,"featured_media":1551,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[],"yoast_head":"\n![\"\"](\"http:\/\/firstexbank.wpengine.com\/wp-content\/uploads\/2023\/10\/How-to-Create-A-Budget-Blog-Images-3.jpg\")
<\/p>\nSet Savings Goals<\/h3>\n
Create Your Budget<\/h3>\n
\n
![\"\"](\"http:\/\/firstexbank.wpengine.com\/wp-content\/uploads\/2023\/10\/budget-allocation.png\")
<\/p>\nFind The Best Budget For You<\/h3>\n
Start A Budget Today!<\/h2>\n
![\"\"](\"http:\/\/firstexbank.wpengine.com\/wp-content\/uploads\/2023\/10\/First-Exchange-Bank-How-To-Create-A-Budget-Infographic.jpg\")
<\/p>\n