Northwest Bank Closes Out National Financial Capability Month, Shares Personal Budgeting Tips for Consumers in Today's Economy

In honor of National Financial Capability Month (also known as National Financial Literacy Month), Northwest Bank shares personal budgeting tips to help customers gain control of their finances and prepare for the unexpected. National Financial Capability Month was designated as a call to action for Americans to not only learn and commit to various savings options, but to also learn more about the different resources available to make informed and effective decisions.
 
With high inflation and costs of living, it’s more important than ever that people have a budget in place to help manage their finances. To help consumers stay on track and feel more financially secure, Northwest Bank provides the following tips:

• Create a budget: Begin by calculating total income. This should include your monthly salary but may also include other income such as tips, child support or alimony payments and investment income. Next, track your monthly expenses – including both fixed and variable expenditures. For variable expenses, determine the monthly average.

• Assess Your Finances: Once your budget has been created, assess your finances by subtracting your total average monthly expenses from your total monthly income. If your expenses outweigh your income, consider ways to cut your expenses or increase your income. If you have money left over at the end of the month, consider opening a savings account or contributing to a 401(k) plan through your employer.

 

• Take Control of Your Finances: To manage your spending and develop a savings plan, consider breaking your expenses down into three categories – needs, wants and savings. Then, use the 50/30/20 rule to allocate your funds accordingly. When using this method, 50% of income should be used to cover needs such as housing, transportation and food, 30% of income should cover wants including entertainment, shopping and vacations, and 20% of income should be set aside for savings or debt reduction.

 

• Stick to Your New Budget: One of the most common reasons that budgets fail is because they are unrealistic. The best way to avoid this mistake is to be realistic about your spending habits and plan for emergencies and special events when creating your budget. Additionally, it is important to remain persistent. Resist the urge to give up on the budgeting process after overspending or falling short of your savings goals. Instead, try again next month.

 
Creating and sticking to a personal budget is an essential component of financial wellness. For more budgeting tips, visit Northwest Bank’s Financial Wellness Center: https://financialwellnesscenter.northwest.bank/money-management/budgeting
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