As National Financial Literacy Month wraps up in April, a local expert in Jefferson gives advice on how to appropriately set up and use a budget.

Home State Bank Vice President Amy Milligan says a budget is simply a worksheet that shows monthly expenses and having a household’s take-home pay account for those items. She advises that the expenses list should include anything housing-related such as rent/mortgage, utilities, insurance, internet; along with food, transportation that would include insurance, vehicle payment, gas and regular maintenance; healthcare, personal and family, and finances. 

Milligan points out that it is also necessary to consistently save money for any unexpected expenses, such as a costly vehicle repair or repairs to a furnace, among other things. She suggests one way to do that is to have a stand alone account with a bank.

“I have people that set up an emergency savings account. And they may be will put in $50 a month and they know that that emergency one is untouchable. So there’s even some ways that a bank can help you see what goes into your savings account, but not be able to electronically transfer it. You have to physically come to the bank to withdraw that money. It’s going to make sure that it’s more of an emergency.” 

Milligan notes that another potential issue that people need to weigh on in their budgets is if they can afford a “want” along with a “need.” She says a need are the expenses that you would have a difficult time living without, whereas a want is something that is an additional expense that you specifically wanted.

“Well, I don’t feel like cooking tonight, so let’s go out. That is perfectly good as long as you have the funds to do that. A vacation, it could be a need for you know mental health, but if you don’t have the money to pay for it, then it’s a want because it’s going to cause you much more harm in the long run trying to figure out how to dig yourself out of that.” 

Milligan adds that there are several apps on electronic devices that can help people figure out how to set up a budget and customize to what you want it to be.