Beginner's Guide to Budgeting

When you start your first job, it’s exciting to have a paycheck. Before that first check, have a plan in place to make smart money decisions. You can start by downloading a budget worksheet or tapping Insights in Texell’s Digital Banking. Learn more details about how Insights helps you track spending later in this article.

Where does your money come from?

Your first job likely comes with hourly paid wages. Getting paid by the hour can make it more difficult to determine how much money you’re bringing in, since the hours you work vary from week to week. Find the average number of hours you work per pay period to create a budget. While some weeks may be busier than others, like during the holidays, you can review the past few paychecks or find one with the lowest pay as a starting point.

If you receive extra money, like birthday cash or extra hours, have a plan in place so you don’t spend it all right away. If you work other odd jobs, like babysitting or lawn care, the income from these jobs also needs to be added to your budget. It can be tempting to spend this if you view it as extra income but consider adding some of these funds to your savings instead.

Follow the 50/30/20 budget rule

If you’re not watching where your money is going, it will be gone before you know it. Follow the 50/30/20 rule for expenses: spend 50% of your income on necessities, 30% on things you want, and save 20%. Necessities include gas or car insurance, phone bill, clothing, or other items you need for work or school. Wants are anything extra, including entertainment, fast food, restaurants, or games.

If you need help creating your budget, there are several apps available. Insights in Texell’s Digital Banking app helps you create a budget and track your cashflow. Add income and recurring bills with their amounts in Cashflow to compare your income to your expenses. You can also set saving and spending benchmarks under Goals.

Create savings goals

It’s always a good idea to have some money saved up, especially an emergency fund. A Save First Account at Texell is a great way to build your savings. Set up an automatic transfer to your savings account with every paycheck. If you’re saving up for a big item, like your first car, determine a schedule so that you can reach your goal and still have an emergency savings fund.

Create short-term and long-term savings goals. Short-term goals are those for less expensive items, like a video game or clothing, while long-term goals are for bigger items, like your first car. Whether your goal is short-term or long-term, create a schedule so that you can reach your goal and still have an emergency savings fund.

Track your spending

Once you have a budget in place that is working for you, try to stick to it. Review it weekly and at the end of the month for spending trends. If you notice that you’re spending more than 30% on things you want, adjust your habits to stay within your budget. Mistakes may happen, but you can use them as motivation to meet your goals. With practice, you can continue to build your spending and saving skills. To learn more about budgeting and creating goals, read our two-part articles Building a Basic Budget — Part 1 and Building a Basic Budget — Part 2.

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