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Can Saving Make You Happier? Five Steps to Budgeting Bliss

Want to be happier? A CIT Bank Financial Bliss survey found two out of three consumers say saving money brings them more happiness than spending it. And spending more does not appear to be the key to happiness either.1

Kick start your journey to achieving financial bliss by creating and living with a budget that works for your expenses and lifestyle preferences. With a budget in place, you can save more and stop yourself from living beyond your means (and ultimately, stressing out).

With a budget in place, you can keep track of how much you're spending each month and stop yourself from living beyond your means — and, ultimately, stressing out.

Practicing better money habits is just five steps away:

1. Identify your net income.

Determining how much you should be saving and spending each month starts by identifying your after-tax income. Include what you take home from your primary job along with any earnings from a side job or hobbies. Don’t forget – factor in automatic deductions for any 401(k) savings, health or life insurance, and tax or business expenses for an honest picture of the cash you take home.

2. Examine and track your spending.

Next, put your spending habits under a microscope. Note the areas where you're spending and record how much. After tracking your budget this way for a month or more, analyze your typical behavior. Are you spending a lot on things that aren't meaningful to you? If the answer is yes, it’s time to choose where to cut down or how to reallocate your spending.

3. List your short- and long-term goals.

Write out the short- and long-term goals you hope to accomplish. These could be milestones you plan to reach in one year or 20 years from now. Don't worry; your goals are flexible. You can always make updates as time goes on. Knowing your priorities will help you choose a savings method and provide support for your spending choices. Example: If you want to buy a new car in two years, you could choose to open a CIT Bank high-yield savings account such a Savings Builder or money market account, or a CD to grow your savings for that length of time by taking advantage of high interest rates. Use our savings calculator to see how small additions to your savings account over time can help you build wealth.

4. Create and implement a budget.

With your spending analysis and list of goals in hand, you’re ready to develop a budget. Start by establishing wants versus needs. One example: Utilities for your apartment are a need, but cable and streaming subscriptions might be a want. Identify what costs you can cut or eliminate. Think about other services or habits where you can create savings to meet your goals. Try using our savings calculator to tackle specific financials. Once you’ve made some decisions, you can outline your budget guidelines and prepare to track yourself moving forward.

5. Review and adjust as needed.

Your budget is not a "set it and forget it" item. You need to regularly check in to see how you're tracking toward your goals, especially as your priorities and financial circumstances change (like getting a raise or deciding to start a family). Achieving the goals you've set is a continuous process. Keep moving forward by revisiting your budget every so often and making changes as needed.

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