The new year is a new opportunity to set financial goals, build better spending habits, and take control of your finances. One of the best ways to ensure financial success is by creating a yearly budget.
A well-planned yearly budget helps you:
- Manage your money.
- Reduce financial stress.
- Avoid unnecessary debt and control spending.
- Prepare for major expenses like holiday shopping and summer vacations.
Key Expenses to Plan For
A well-rounded budget includes all your regular monthly expenses, such as mortgages, utilities, and groceries. However, it should also include irregular or seasonal expenses that can catch you off guard.
Summer Activities and Kids’ Expenses – for many families, summer brings an increase in expenses like summer camps, childcare, sports leagues, and entertainment.
How to Budget:
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- Determine the costs of all summer activities for each kid.
- Start saving in the spring to build funds.
- Take advantage of discounts and early registrations.
Summer Vacations – a summer getaway is a great way to recharge and unwind, but vacations can be costly and stressful if not planned. Instead of putting everything on a credit card, save throughout the year for your summer getaway.
How to Budget:
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- Set a realistic vacation budget by including travel expenses, accommodations, food, and activities.
- Start a Vacation Club Savings account and set up monthly automatic transfers from your checking account.
- Look for cost-cutting deals like booking early and travel rewards.
Christmas and Holiday Shopping – the holiday season is one of the most expensive times of the year. Between gifts, travelling, decorations, holiday meals, and holiday parties, costs can add up quickly. Instead of using credit cards or dipping into your emergency fund, start saving early.
How to Budget:
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- Estimate how much you spend in total on all holiday gifts, travel, food, and festivities.
- Divide that amount by 12 and automatically deposit that amount monthly into your Holiday Club Savings account.
- Look for sales throughout the year and consider buying gifts in advance to spread out expenses.
Steps to Creating a Yearly Budget
- Assess your income and expenses – calculate your total income for the year and list all fixed and variable expenses.
- Set a savings goal – determine how much you need to save for major expenses including the ones we listed above and your emergency fund.
- Break it down monthly – divide your savings goals into smaller, manageable monthly amounts and set up automatic transfers to them.
- Monitor and adjust – review your budget regularly to ensure you’re on track and to adjust it if unexpected expenses arise.
Utilize the Money Management tool that has a Budgets option located in Online Banking and in the 1st Summit app. This system will automatically create a budget for you using your historical spending data by category. You can also add your future savings goals to it too.
A true community bank for the past century, 1st Summit Bank primarily focuses on relationship banking for both consumers and businesses within our region. 1st Summit Bank provides banking, financial, and investment services through 18 full-service community offices and a loan production office within Cambria, Westmoreland, Blair, Somerset, and Indiana counties.
