Given the current state of the economy it's no surprise that we're all paying closer attention to where our hard earned dollars are being spent. If you don't already have a savings plan, today is a good day to start. As prices on everything from milk to gas are on the rise this task may seem insurmountable, but just like today's economy, life is unpredictable. There is no time like the present to build an emergency reserve to help cushion the blow of unexpected or emergency expenses.

The very first step toward creating a savings plan and successfully managing household finances starts with a budget. Even if you are a household of one, a simple budget can help you control expenses, ultimately setting you on the road to a solid financial future.

An important part of making a budget is to see savings as a regular expense that you pay yourself first. As you begin, include as much information as you can. Keeping detailed and accurate records allows you to spot places where you can save money and determine how much you can reasonably spend.

The American Bankers Association has created an easy to follow, step-by-step process to create a basic budget. We'd like to share it with you.

Step #1 Total your current monthly income. We recommend you do this on a monthly basis. Include only your take home pay, that is your salary minus taxes and deductions. Your income may also include tips, child support, investment income, etc...

Step #2 Budget by month. Some of your expenses will vary from month to month, like utilities or a cell phone bill so use a monthly average. For those expenses that don't take place regularly such as a visit to the dentist take the average and divide by the number of times you go a year. For example, if you see the dentist two times a year and pay on average of $75, then multiply 2x$75 and divide by 12 to set aside a dental expense each month.

Step #3 Evaluate your debt to income ratio. As a general rule, rent or mortgage payments plus your credit obligations should not exceed 35 to 40% of your gross monthly income, your pay BEFORE taxes and deductions. The amount you owe on credit cards, monthly car payment, student loans and other monthly payments should not exceed 10 to 15% of your take-home pay (your salary minus taxes and insurance.)

Step #4 Put it writing. You can't save money unless you know what you are making and what you are spending. It sounds simple, until you sit down and see it writing. You may surprise yourself to see where your money is actually being spent. There are a variety of sophisticated computer programs available to help you create a savings plan, but a simple worksheet can help you accomplish the same result - cut expenses and save money. First Bank and Trust of Indiantown has a budgeting worksheet available to download on our website for free at www.fboi.com. (Also available in Spanish), or stop by our location in Indiantown or Palm City for a copy.

Step #5 Do the math. The last step in creating a budget is to total all of your monthly expenses and subtract them from your total income.

How did you do?

If you are breaking even, or if you are using credit to make ends meet, you need to make immediate adjustments. Take a critical look at all of your expenses. Perhaps there are places where savings can be made such as haircuts, dry-cleaning, and entertainment.

Try to comparison shop your phone, cable and cell phone providers. Make sure you aren't paying for extra services you don't need such as call-waiting or call forwarding.

You can also comparison shop for lower auto and homeowner's insurance rates. Sometimes you can save more money if you consolidate to one company.

Don't forget to contact your utility company. Most utilities will send an energy expert to your home to do an analysis and see where you can make changes to save money and energy.

If you are still having trouble, there is nothing wrong with asking for help. There are many agencies in our area ready to provide assistance. We recommend dialing 2-1-1. 2-1-1 is an important source for information and referral services on the Treasure Coast and Palm Beach County. The operators have access to hundreds of social service and community programs in our area such as daycare, food and utility assistance, housing, financial services, elder care, crisis counseling and so much more. The service is free, confidential and available 24-7.

Visit us online at www.fboi to find additional money saving tips and an easy to use budget worksheet.