Give Every Dollar a Job

Controlling your spending is a skill that takes practice and discipline.

What’s Your Style?

Different people have different relationships with money. Some are natural savers with more money left at the end of the month. Others are spenders with more month left at the end of the money. If you haven’t yet, spend thirty days recording your spending activity and determine your style. Keep a log, journal, or notes on your phone on what you’re spending every day and what you’re buying. Tracking your expenses will help with your next step.

Every Dollar On a Mission

You’ve probably heard people say to live on less than you make. Once you know your expenses, use a free budgeting tool like the Orange Budget to record your income and plan your spending for the upcoming month. Assign a task to every dollar you earn. Budget to save money, but be sure to set funds aside for entertainment, shopping, and other miscellaneous items. When every cent has a predetermined destination and income minus spend equals zero, you have created a zero-balance budget; this is the goal. Follow the budget instructions for more assistance.

Banking Basics

Choosing a bank or credit union is an important step in establishing your financial foundation. When choosing a bank, consider the following:

  1. Convenience – It is generally easiest to work with a bank or credit union that is close to where you live or work, as a physical location is more convenient when making transactions. As you shop for banks or credit unions, ask yourself:
    • How is the customer service?
    • What are the hours and accessibility policies?
    • Do I prefer to write checks or pay most bills online?
    • Do I prefer to use an app or talk to someone in person?
  2. Cost – Avoid fees on your accounts. Common charges include ATM fees for withdrawing cash at an ATM not associated with your bank, overdraft fees, and monthly maintenance fees. Take note of your bank or credit union’s fee schedule as it outlines of the different fees and costs. Many banks have accounts that do not cost any money to use so long as you maintain a positive balance. Others can charge fees for service that can add up over time. Be sure to understand what costs are associated with your accounts before you sign up.
  3. Legitimacy – You will want to make sure whatever institution you choose is insured by the FDIC (Federal Deposit Insurance Corporation) for banks, or the NCUA (National Credit Union Administration) for Credit Unions. Use FDIC BankFind or the NCUA Credit Union Finder to explore options in your area.

Once established, most of your daily transactions will go through a basic checking account, but you can use other accounts for emergency savings and saving for larger purchases, like a basic savings account or money market account. Ask questions, and don’t put your money into any account that you don’t fully understand. Explore more information on banks vs. credit unions.