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Budgeting Spending and Saving

What is the first step in prioritizing expenses?

Establishing your Needs vs. Wants. Needs are things that you absolutely must spend your money on, like: housing, food, utilities, and in the case of a college student, tuition. Wants are things that you choose to spend your money on, like: shopping, entertainment, travel, and eating out. Once you establish your Needs vs. Wants, you can begin to prioritize by setting goals for yourself, planning ahead for big expenses and establishing a budget.

What is an Expense Report?

An expense report is a running list of all expenses incurred over a specific amount of time. It can be based on a weekly, monthly or yearly time-frame and it allows you to see exactly what you are spending your money on. When crafting an expense report it is important to make sure you record every expense, no matter how large or how small.

What is a Budget?

A budget serves two purposes: it is a comparison of your expenses and sources income and it is a plan for how to use and allocate your money. Once you compare your expenses and income, you can begin to ask yourself questions about what you see: Are your expenses more than your income? If so, can you cut back on your expenses? Can you increase your income? After you do that, make adjustments.

What type of bank account is right for me?

There are a variety of bank accounts available to consumers depending on the type of benefits they desire, how easily they want to be able to access their money, and if they are using the account for everyday purchases.

Checking: used for everyday purchases and pays little to no interest

Savings: used to save for the future and pays interest to consumer

Certificate of Deposits (CD): like a savings account but pays higher interest & money must stay in the account for a pre-determined amount of time

Money Market Accounts (MMA): Also like a savings account, but for large sums of money. MMA's require a higher minimum balance.

Individual Retirement Accounts (IRA): Used for putting away money for retirement and can be done so tax-free.

What are some good tips on saving money?

If saving money were easy, everyone would be good at it. However, there are a number of useful tips which should help you put away money for when you need it. A good rule of thumb is to employ the 50/30/20 rule where you spend 50% on essentials (or Needs), 30% for lifestyle (or Wants), and 20% to be put away for savings. It is also important that you avoid impulse or emotional purchases, as well as plan ahead for big purchases. Finally, always have an "Emergency Fund" on hand for times when you need quick access to disposable income.