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Develop A Winning Budget Strategy On Any Income

By: Fairmont FCU
Published: 03/27/2018

It happens every year. As the snow melts, people everywhere turn their collective attention to basketball tournament brackets in hopes of winning big in the office pool, or pulling for WVU & FSU. But what if you could extend that rush of winning to last all year?

With a little planning, you can prioritize your budget to score big by creating your own budget bracket! To do that, it’s important to identify your “Fixed Expenses” and “Flexible Expenses.”

Fixed Expenses

Fixed expenses are those payments that you make each month that you have little-to-no control over. Examples of these payments include: Rent or mortgage,
health insurance, car insurance, student loans, etc. These can be adjusted when you sign up or switch services, but otherwise these payments do not change and must be paid.

Flexible Expenses

These are the things that you spend money on monthly that you can be changed. It’s important to understand Need vs. Want in this situation. There are things that you need to survive (groceries) and then there’s things that you want but can live without (fun money). Why aren’t the Needs in the Fixed Expenses category? Because you can adjust what kind of groceries you pick up, how often you eat out at restaurants, etc. But hobbies and a social life can also be as important.

Bracket Time

To create a bracket, you will first need to determine your monthly income: how much do you make each month? The next step is to subtract all your Fixed Expenses from that total. What remains is what you will be working with for the bracket.

Then sit down and write out as many monthly flexible expenses as you can think of, and aim to have at least 16. Flexible Expenses examples include: groceries, hobbies, going out, internet, new clothes, gas for your car, cellphone, savings, etc. Place them randomly into a selection bracket, and run through each section. Is “cellphone service” more important than “new clothes?” How about “groceries” over “happy hour?”

The winner doesn’t necessarily get the rest of your monthly income, but those who make it further in your bracket are your priorities - the things in your life that matter most. Start with the winner and determine your spend towards that each month, then work backwards from there. Usually the important things like food and internet will be at the top, and the things that are not as important filter to the bottom. It should be the same for budgeting.  

It gives you some perspective on where your money goes each month, and it can also give you a cap on how much you want to spend. If you give yourself a budget and follow it, you can limit yourself from overspending on things that may not be an actual priority for you. Having some money left over to go into your account is also a good idea for any unexpected payments or emergencies.

March Madness doesn’t need to end with March, and you can do this exercise year round. And you’re not alone if you’re looking to save big. Fairmont Federal Credit Union is courtside with you. Call 304-363-5320 or stop in the nearest branch location today!


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