Ready to take control of your finances but not sure where to start? A budget is one of the most powerful tools to help you save more, spend smarter and reduce financial stress.

The good news? Budgeting doesn’t have to be complicated. Follow these three simple steps to create a budget that fits your lifestyle and financial goals.

Step 1: Know your income and expenses

Before you create a budget, you need to understand where your money is going. Start by listing:

• Your income – Include your paycheck, side hustle earnings and any other sources of money
• Your fixed expenses – Think about rent/mortgage, utilities, insurance, loan payments and necessary subscriptions
• Your variable expenses – Consider groceries, dining out, entertainment, shopping and other flexible spending

Look for areas where you might cut back. Maybe you’re paying for a subscription you rarely use or dining out more than you realized. And don’t forget about late fees — those can add up quickly! Setting reminders for bill due dates will help you avoid unnecessary charges and free up more money for things that matter.

Step 2: Pick a budgeting method that works for you

Now that you have a clear picture of your finances, it’s time to choose a budgeting style that fits your life. Here are two popular options:

Zero-based budgeting
This method ensures that every dollar is assigned to a category — bills, savings, debt repayment or spending — so that at the end of the month, your income minus expenses equals zero. It’s great for sticking to a plan and cutting overspending, but it does require close tracking and more discipline.

The 50/30/20 approach
This method is popular for a reason. It’s simple and customizable to your life without being too strict. With the 50/30/20 approach, you divide your income into three broad categories:

• 50% for needs (housing, utilities, transportation, food and bills)
• 30% for wants (dining out, entertainment, shopping)
• 20% for savings & debt repayment (rainy day fund, retirement savings and tackling existing debt)

Our favorite feature of this method is the flexibility. You can alter the percentages to meet your needs as long as you understand the underlying concept of needs, wants, savings and debt.

No matter which method you choose, whether it is one we mentioned here or another popular budgeting strategy, the key is consistency. Pick a system that works for you, adjust it as needed and stick with it!

Step 3: Automate your savings

One of the easiest ways to build savings is to set it and forget it. Automate a portion of your paycheck to go straight into savings before you even see it. Doing this removes the temptation to spend!

Pro tip: Start small if you need to. Even saving just 1 to 5% per paycheck adds up over time. Begin saving as soon as possible so your money has time to grow, thanks to the power of compound interest.

Why budgeting matters

Switching from free-form spending to budgeting takes practice, but it’s worth it. A budget helps you avoid stress and ensures you’re on the path to financial freedom. By sticking to your budget, you’ll pay off debt faster, build savings and feel more in control of your money.

Ready to start saving?

OPEN AN ACCOUNT

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