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Celebrate Thanksgiving by Creating a Budget

Don't let financial stress put a damper on your Thanksgiving holiday. One of the best ways to manage your money is to create and maintain a detailed budget. The key to a good budget is including as much information as you can so you can adequately prepare and plan. It's important to keep accurate records of your spending so you'll spot places where you can save money and know how much you can reasonably spend. Follow these steps and, before long, you may be surprised by how much you have to be thankful for!
  • Figure your current income. The first step in creating a budget is to total all of your income, or money coming in. It's typically best to do this on a monthly basis. Include only your take-home pay (this is your salary minus taxes and deductions). Your income may also include tips, child support, investment income, etc.
  • Track your monthly expenses. Next, you'll need to track your expenses, or money going out. Some of your bills will vary from month to month, so use a monthly average. For example, if your cell phone bill is $45 one month and $55 the next, estimate $50 per month. For annual bills, divide the yearly cost by 12 for a monthly figure.
  • Know your limit. Rent or mortgage payments plus your credit obligations should not exceed 35 to 40 percent of your gross monthly income. The amount you owe on credit cards, car payment, student loans and other monthly payments should not exceed 10 to 15 percent of your take-home pay.
  • Put it in writing. Tally up all your spending. Don't forget your daily coffee or snacks. Those can add up quickly!
  • Do the math. The last step in creating your budget is to total all your expenses and subtract them from your total income.
Once you've done the math, find which of the following three scenarios best describes your financial situation, and review the tips that follow.
If your income and expenses are EQUAL...
  • You might be living paycheck to paycheck. Cut expenses and develop a savings plan in case of emergencies or unexpected expenses.
  • If your income and expenses equal each other, but only because you're using credit to survive and paying only minimums each month, you may need to talk to a debt counseling service to help you get back on the track to live within your means.
If you have MONEY LEFTOVER...
  • You're doing a good job of managing your expenses. Here are some suggestions for the leftover money:
    - Open a savings account at a bank.
    - If you already have a savings account, consider setting up automatic transfers to your savings account or, if you have direct deposit, ask your employer to put a portion of your paycheck in your savings account automatically.
    - Also investigate whether your employer offers a 401(k) or other employee matching savings plan. The contribution you make to this type of account is taken out of your paycheck before taxes.
If your total is NEGATIVE...
  • You need to make adjustments immediately. Keep in mind that it's usually easier to cut back on expenses than to increase your income. Analyze your budget to see where you can cut expenses.
  • Call your utility, phone, cable and cell phone providers. There may be ways to cut those bills.
  • Consider increasing your income if possible by getting a second part-time job or by working overtime.

You can take charge of your finances and your life by setting financial goals, planning a budget and sticking to it.


These tips are provided by the Iowa Bankers Association (IBA), representing banks and thrifts in the state. The IBA serves it members by providing legislative advocacy, training, regulatory compliance and other services designed to enhance the ability of banks to serve their communities.  Learn more at



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