Getting Started

1. Determine your after-tax income. This is the amount that lands in your checking account after expenses such as health and life insurance and 401(k) contributions are deducted. You should never spend more than this amount or you will find yourself running up debt to cover your expenses. 
2. Calculate expenses. Next, track exactly how much you’re spending each month and where the money is spent. You can do this by looking at bank statements or recording all expenditures in a checkbook. Remember that underestimating your spending will ruin a budget, so record every purchase you make without exception.
3. Add some wiggle room. When calculating your expenses, also figure in a cushion for unexpected bills such as car repairs or family emergencies. A good guideline is to add 10-15% of your budget.
4. Crunch the numbers. Now it’s time to determine if you have a budget overage or shortfall. Do this by subtracting your monthly expenses from your income. If you are making more than you are spending, congratulations! Put that extra money in a savings account or pay off debt. If your budget is in the red, you must cut expenses or increase income until the numbers are balanced.
5. Set savings and debt reduction goals. Don’t forget to pay yourself by putting money aside for the future. Having a savings fund will give you peace of mind and something to fall back on in the event of financial emergencies. Find out how much money you should save. 
6. Be flexible. Your budget may need to change from month to month as life happens. Be flexible but always strive to live within your means to reach your financial goals.

Get More for Your Money at City Bank

City Bank features a full range of services to help you reach your financial goals faster. From Reward Checking to construction loans and auto loans, we have you covered with friendly, professional service from a local community bank. To get started, please call (800) OUR-BANK, stop by your local City Bank branch location or contact us.