3 “wiser” ways to use your tax return
Before you head to the mall with your tax return dollars, you might find that there are smarter ways to make the most out of your refund.
COVID-19: The health and safety of our customers and colleagues is our top priority. Visit Plains Commerce Cares for the latest information.
Creating a budget takes some work. And sticking to isn’t always a simple task—but doing so can help you reach greater financial and life goals. So, how can you create a budget and stay on track? While everyone may prefer something different, we have some tips to help you get started.
Before you even sign up for a budgeting tool online or on your smartphone, you’ll need to know your monthly expenses and income.
“If you have a family, sit down together and talk about your financial priorities,” says Jason Appel, EVP and Plains Commerce Bank Branch Manager. “Staying on a budget is a team activity that takes input and sacrifice from adults and children.”
Start by analyzing how you’ve spent money in the past. Categorize past spending into as many individual line items as you wish, but organize them under two buckets: non-discretionary and discretionary expenses.
Non-discretionary expenses have to be paid—like rent, debt, car/life insurance, utilities, food, reasonable clothing expenses, fuel, daycare, etc. Other items are considered discretionary, as you can choose whether or not to spend money on them. Also, include line items for saving and retirement.
Once you complete this, it is time to start looking ahead.
Why are you budgeting in the first place? This is where establishing financial objectives helps. Most people want to save money. If that’s your case, answer what are you saving for? Do you want to establish a comfortable cash cushion, accelerate debt repayment, invest, or save for a child’s education?
Once you’ve identified your goals, prioritize your discretionary spending. See what can be reduced, and if by doing so, you can meet your financial goals. If you can’t cut enough to meet your goals, move to your non-discretionary items. This may involve downsizing your largest assets, such as a car.
Now that you know what you spend and why you’re budgeting, you can look for tools or apps to help you track your financial life. While each app that you find has its own unique benefits, we’ll leave it up to you to decide which will work best for your financial situation.
Need some pointers for staying on top of your budget? You Need a Budget also puts together courses and resources on common budgeting to help you succeed. Many of them are free, too!
“When you first get started, I’d recommend reviewing your spending monthly and continue re-evaluating things every 3–6 months,” says Jason. “Avoid the pitfall of increasing your budget items. Instead, focus on reducing unnecessary expenses going forward. Sit down with your family and discuss your results, both good and bad. Be sure to celebrate your success, too."
While we offer this link for your convenience, please note that we are not responsible for the content provided by third-party websites. We encourage you to review the policies of any website prior to sharing personal information to ensure privacy and security. Any products or services accessed through this link are not provided by, endorsed or guaranteed by Plains Commerce Bank.Continue Stay on plainscommerce.com