Pen Pencil Calculator Money Budget

Banking Basics: Creating A Budget

Dated: September 20, 2022

When you are new to saving money, it is important to understand what budgeting is and different strategies to save.  Being able to acknowledge areas where you are over spending helps to put more money into your account for the future.  Furthermore, budgeting is a very important step when it comes to money management. It allows you to compare how much you earn to how much you spend, allowing you to make good choices with your money.

What is a budget? A budget is your monthly income and what you spend your money on monthly.  It is a game plan or understanding of how money moves in and out of your accounts.

With that said, let’s look at how to create that budget to start your savings journey.


Step 1: Calculate your net income

First, you will need to look at how much you make each month.  Net income is your take-home pay.  Focusing on your take-home pay will allow you to work with only what you will have available to you. Make sure to differentiate between guaranteed pay (regular paycheck) and supplemental income (money from side gigs). Within online banking, income would be any deposits that went into your account that month from cash deposits, Remote Deposit Capture, or payroll.

Second, review what happens to your pay check. Do you physically deposit your check, or do you have direct deposit? Do you have anything that is paid automatically as a distribution, such as a loan payment that comes out of your pay check? You will want to know how and when your deposits happen in order to make sure your money is always right where you need it.


Step 2: Track your Spending

Once you know how much money you have coming in to work with, you will need to figure out where it’s going.  Tracking and categorizing what you spend your money on will help you understand better what you are spending on the most and where it might be easiest to save. Divide it into categories:

  • Fixed Expenses.  These are regular monthly gills like a car payment or rent.
  • Variable expenses.  These are expenses that can change, or maybe only happen a few times a year such as gas, entertainment, or shopping.

Variable expenses are where you will have the best chances of scaling back to save money.  Can you reduce the number of times you order take out, or eliminate a boredom shopping trip?

Similarly, review your bank account and transaction history. Have you been paying unnecessary fees you could mitigate? Can you save money by having direct deposit or ACH transactions?


Step 3: Set goals that you can reach

To help stick to your budget, make a list of your short-term and long-term goals that you would like to achieve financially.  Short term goals would be a goal that you would like to achieve in one to three years, such as a vacation, a down payment for a car, or college tuition.  Long term goals could take a decade or more to reach, such as saving for your first house.  Your goals do not have to be permanent and you can change them at any point to reflect your needs.  This will also help you reduce spending if you know that you are saving for a vacation or a car.

Tip: Research the cost of your goals! If you know you want a new car, take a moment to look at new versus used car values. Check out that flight cost to Hawaii and accompanying resort. Create that Pinterest board. This will help them feel more tangible, and make sure you have adequate spending money when the time comes.


Step 4: Have a plan

Create a mental roadmap of where you will be cutting expenses. Make sure to do the math between your original spend, and your projected spend. Set specific, but realistic, spending limits for each category of expenses.

Anticipating how you can make changes makes the hurdles easier to get over, such as researching free places for dates (Travel Wisconsin is a great resource), planning alternate routes to work such as by bike or by foot, and setting a fixed grocery schedule so you don’t rely on fast food as much. Put major behavior changes on your calendar to help set a routine.

Additionally, your financial might have products available to help you save such as Debit Card Roundup, or an Adventure Savings that separates your special money from your spending money.


Step 5: Adjust your spending to stay on budget

As time goes on, make the necessary adjustments needed so you do not overspend.  You need to decide what are your “wants” and what are your “needs”.  The “wants” are what you will need to cut first.  You will need to decide if it is a true need or if it is just something that you think is hard to part with.

If you are still having an issue making everything add up, look at your expenses.  Can you shop around for a better rate?  Or see if you are able to downsize for a smaller plan?  Even a small savings will help you in the long run.


Step 6: Review your budget regularly

Once you have set your budget and are ready to go, you will need to review it regularly to make sure you are on track. A few things may change such as a raise (increase in income) or the cost of gas fluctuating (increase in expenses).  When this happens, you will need to follow the above steps again to make sure you are still able to save for the goals you set.

The best way to keep an eye on your budget is to check your money regularly. Get familiar with online banking and set up transaction alerts!


Budgeting is an important step in saving for what you want.  If you need more help, or would like to speak with a person on creating a budget, you can always come to an Evergreen Credit Union branch. Our team would love to help you!  They are more than willing to sit down with you and go through the process and may even have additional insight on how to save better!

Are you ready to start saving? Call (920) 729-2999 or stop by to make your appointment today. Membership is open to everyone who lives or works in Outagamie, Waupaca, Waushara, Calumet, or Winnebago counties in Wisconsin.

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