As summer winds down and the back-to-school season approaches, it's time to revisit your family budget. The start of the school year brings with it a wave of expenses, from school supplies and new clothes to extracurricular activities and unexpected costs. Managing these expenses effectively requires careful planning and strategic financial tools, like Certificates of Deposit (CDs).
In this post, we'll explore how you can prepare your family budget for the school year while making the most of First Independent Bank’s 24-month and 7-month CDs.
Assess New School Year Expenses
The first step in preparing your budget is to take stock of the expenses you're likely to face in the coming months. In addition to your everyday life expenses, a new school year might also include:
- School Supplies: Notebooks, pencils, calculators, and other essentials.
- Clothing: New clothes, shoes, uniforms, and seasonal items.
- Activities: Fees and equipment for sports, music, and other extracurricular activities.
- Technology: Tablets, laptops, or software that may be required for schoolwork.
- Lunches and Snacks: Packing lunches or buying school meals.
- Unexpected Costs: Field trips, fundraising events, or emergency purchases.
Creating a detailed list of these expenses will give you a clearer picture of how much you need to budget for the school year.
Create a Monthly Budget
Once you’ve identified your ongoing and new expenses, it’s time to create a monthly budget. Start by categorizing items into fixed and variable costs. Fixed costs are those that remain constant every month, such as your mortgage or rent, utilities, and insurance. Variable costs fluctuate from month to month, including groceries, transportation, and entertainment.
Consider setting aside a specific amount each month for school-related expenses. This can help you avoid the stress of last-minute purchases and ensure that you’re prepared for any surprises.
Understand CDs for Strategic Use
Now that you have a clearer picture of your expenses and budget, it’s time to think about how you can save strategically. This is where First Independent Bank’s Certificates of Deposits (CDs) come into play.
24-month CD: A 24-month CD offers a stable and predictable way to grow your savings over a longer period. First Independent Bank’s 24-month CD offers a variable interest rate, which means you can capitalize on higher rates when they come, while also having the safety net of a floor if rates drop. This CD is an excellent choice for expenses that you can anticipate in the future, such as tuition or a big purchase like a new laptop. Additionally, this CD comes with 2 unique benefits: a one-time deposit option and a one-time withdraw option. By locking in your funds for 24 months, you benefit from a higher interest rate than a standard savings account and you remove the money from your regular accounts, reducing the temptation to dip into your savings for non-essential expenses.
7-Month CD: For shorter-term savings goals, the 7-month CD is a perfect fit. This CD allows you to earn interest on your money while keeping your funds relatively accessible. It’s an ideal option for managing mid-term expenses that arise at the end of the school year, such as graduation, next year’s tuition, or summer camp. The shorter duration means you’ll have access to your funds sooner, just in time for when you need them.
Align Your CDs with Your Budget
The key to successfully using CDs in your family budget is to align them with your expense timelines. For short-term needs, use the 7-month CD to set aside money during the fall and winter. This money will grow throughout the school year and be available in time for an end-of-year field trip or summer celebrations. The 7-month CD ensures your funds are working for you but are still available when you need them.
For expenses that are a bit further down the road, like saving for graduation, a first car, or college tuition, the 24-month CD is an excellent choice. It offers a higher return over time with flexibility for unique needs that arise during the 24-month duration. The benefits of this option help you maximize your savings for larger expenses that you can plan for.
By strategically using both CDs, you can ensure that your money is working for you, earning interest while being set aside for specific purposes.
Review and Adjust as Needed
A budget isn’t static—it’s something that should be reviewed and adjusted regularly. As the school year progresses, keep an eye on your spending and compare it against your budget. If you find that certain expenses are higher or lower than expected, adjust your allocations accordingly.
Additionally, as your CDs mature, consider rolling them over into new CDs or moving the funds into other accounts, depending on your upcoming financial needs. First Independent Bank offers flexibility in how you manage your CDs, ensuring that you can continue to grow your savings and stay on track with your budget.
Start Planning Today
Preparing your family budget for the school year doesn’t have to be stressful. With careful planning and strategic use of financial tools like CDs, you can manage your expenses with confidence. First Independent Bank’s 24-month and 7-month CDs provide you with the flexibility and security needed to meet your family’s financial goals, both in the short and long term.
Start planning today and take the first step into a financially smooth and successful school year.