Connect the money coming in today with the expenses and decisions waiting months or years down the road with the simple, step-by-step financial planning tips in the guide below.
The basics of financial planning are easy to pick up — you’ve got to account for regular bills and give savings a purpose. Debt is a natural tool to support a healthy financial life, too, but make sure to look at borrowing decisions in context before you commit to large ongoing payments.
Financial planning can also look different depending on where you live. In Wyoming, our local businesses have a wide range of seasonal needs and income structures. For instance:
- A household with two steady paychecks may organize money month by month
- A ranch may collect a large share of annual revenue after livestock sales
- An oilfield contractor can move from a packed project schedule into a slower stretch
- Construction income can rise sharply during warmer months
The timing varies by your line of work, but the same financial planning basics will still apply: you’ve got to get to know your cash flow and maintain useful reserves, and your plan should evolve as circumstances change.
Let’s get into it.
Table of Contents
Budget Around the Money You Really Have
An idealized average month can work as a planning baseline for some families with steady income and recurring expenses. However, if possible, a budget always works best when it reflects the timing of actual income and specific expenses for a given period of time — which may vary around the calendar year.
This is felt most acutely by business owners with seasonal ups and downs as well as workers with commission or gratuity-based income.
So where do you begin?
- First, identify dependable income for the stretch of time covered by the budget. This is a conservative baseline for “money in” that you know you can count on.
- Then, account for the bills that continue regardless of what else happens. This is your “money out” baseline. Think housing, utilities, insurance, loan payments, food, transportation.
Variable income requires extra planning. In Wyoming, our agriculture and energy industries have strong months that may be followed by lean ones, while contract work follows its own project cycles.
If you fall into the group of people who need to create a budget for seasonal income, you’ll want to give the slow season even more attention than the peak. Estimate the lowest-revenue stretch and calculate the fixed costs due during that period. You will need to reserve a portion of your stronger-season income to cover the difference.
Businesses may also benefit from separating their annual profitability from monthly cash flow. It’s easy to fall into the trap of the bird’s eye view, where it’s clear the company is profitable on an annual basis, but then find yourself in a bind if payroll or equipment costs arrive before customer payments do. Your monthly projections have to reveal those kinds of pressure points early enough to prepare.
Personal budgets need similar flexibility, but on a household scale. Your property tax bill could make one month unusually expensive. So could an annual insurance premium or vehicle registration. These sorts of known, large, irregular expenses will make each month a little different in your yearly plan. Budget carefully with unique monthly nuances in mind so those temporary expenses don’t dip into money you’ve set aside for true emergencies.
Save for Stability and Opportunity
Savings could be one big bucket, but it’s better to have it planned out with multiple buckets that each serve specialized purposes. Here are three possibilities to get you thinking:
- An Emergency Fund. This is the money you’ve got tucked away to cover unexpected, urgent expenses. Some common examples would be things like major vehicle repairs or urgent roof work after a storm. Medical costs and a sudden income interruption can qualify as well. It’s not easy to wait until you can save a large amount at once, so instead, try to build your emergency fund over time in small, manageable increments. Work toward an initial $500, then $1,000, and so on as you pursue a steadily larger reserve. Automatic transfers or micro-saving apps are great for steady background progress.
- Long-Term Saving Goals. Consider how much you should have in savings at each stage of life and adjust your targets as income and obligations change. What are your current responsibilities? What’s your next big goal? A young adult fresh out of college will have different goals than a homeowner raising children, or a senior professional prepping for retirement. After emergency needs are accounted for, it’s good to have a separate savings for your next big step in life (buying a home, saving for children’s college, growing your retirement accounts, etc.)
- Certificates of Deposit. If you can, make your savings work for you! Have money you can leave untouched for a defined term? Consider opening CDs. They use a fixed rate to give you predictable earnings during that period. Money earmarked for immediate bills or emergencies generally needs greater accessibility. Since banks set their own CD rates, think about when it will be best to lock them in. Evaluate the rate alongside the term and your expected need for the money.
Prepare for Milestones That Will Reshape Your Budget
Major (costly) life milestones can alter years of future spending. Even for basic financial planning, you’ve got to plan ahead if you want to hit them on time.
Homeownership is a great example of a milestone that really reshapes your budget. The purchase price is the headline item, but think about everything else that goes into owning a home. Your mortgage payment includes principal and interest along with property taxes. Then there’s homeowners insurance (and some borrowers with lower down payments will also pay mortgage insurance). The homeowner is also responsible for ongoing maintenance and repairs. It adds up!
Before you shop seriously for a home, take time to talk with lenders and ask questions about loan programs you may qualify for and expected closing costs. What monthly payment and expenses can your budget comfortably absorb? Your early preparations may uncover costs and requirements you would have otherwise overlooked during a first purchase.
If you’re a parent, you may want to bring financial planning into family life before your child even has to think about these kinds of major milestones or apply for a loan. Start a checking or savings account with your child to teach balance management and routine saving. A bit down the line, you can also work responsible credit use into the lesson.
It’s possible to help your child build credit, too, so they’ve got a leg up for all these major life events. Authorized-user status may be appropriate for some teenagers. After age 18, you could also think about the controlled introduction of a secured card.
Borrow Carefully and Explore All Your Options
Debt isn’t something to be scared of — at least, not when you’re taking it on for the right reason, and with a plan to repay it. A loan or credit card may help you finance something useful while spreading its cost over time when an upfront purchase wouldn’t have worked out.
Before you commit, though, make sure the payment plan will comfortably coexist with the rest of the budget. Missed payments are bad for credit and can also affect your interest on the debt. Credit cards have really high rates of interest, so they’re best used for short term debts that you can reliably pay off soon.
For larger expenses, you’re usually looking at debts with more manageable, long-term repayments like personal loans or mortgages.
If you’re a homeowner and need a large influx of cash for something, you may eventually have the option to borrow against the equity accumulated in your property. There’s a few ways to do it:
- A home equity loan gives you one lump sum, taking out against the equity, with fixed payments.
- A home equity line of credit (HELOC) is a bit different — it’s a revolving line that can be drawn on as needed. Available credit returns as the borrowed balance is repaid.
Take a closer look at the difference between a HELOC and a home equity loan before you choose one or the other, so you can match the borrowing structure to the expense. Because both use your home as collateral, repayment is really important.
Business owners are used to taking on large debts for startup capital or temporary stopgaps before the next burst of income arrives. Agricultural borrowing, for example, has this kind of rhythm. Farms and ranches have to look at repayment capacity and working capital alongside the price of the asset. It’s a good idea to test a proposed payment against a weaker year. Lower commodity prices or an unexpected repair bill may expose a loan structure and leave too little room for setbacks.
Protect the Money You Have Already Earned
Account security is just as important to a good financial plan as budgeting and saving. The digital world has accelerated financial risks, and it’s not all because of big data leaks. The smallest mistakes from unsuspecting individuals or employees can open you up to fraud.
Here are a few basic guidances as food for thought:
- Always independently verify any unexpected messages requesting payment or login information. Contact the organization with a known number or on its official website — do not respond through the message itself. Anyone that’s pressuring you to pay immediately should immediately raise suspicion and give you another reason to verify the request first.
- It’s wise to use unique passwords for each account and online profile you have. This limits the damage if one login is compromised.
- Phishing emails have been around since the birth of email, but they continue to target account information today. Scams can also arrive through fake checks and altered QR codes.
- Some schemes disguise themselves as an apparent overpayment and ask the recipient to return part of the money before the original check is discovered to be fraudulent.
- Pay attention to where larger balances are held. A property sale or major business transaction can temporarily leave substantially more cash in an account than usual. Those situations warrant a conversation with your bank about deposit coverage and the appropriate account structure.
Review more current fraud prevention tips to keep your protective habits current as tactics evolve. Security State Bank Wyoming also offers identity theft protection and digital card-management tools for customers.
Review the Plan as Your Finances Change
Income changes and children grow up. A one-time renter may someday buy a house, while a ranch could acquire another parcel. These sorts of changes will happen throughout the life of a family or a business, and interest rates will always be moving up or down in the background, too.
Keep up with regular reviews of your finances as savings goals get crossed off and others take their place. Changes in circumstance have to change the rest of the plan. Look with fresh eyes at least once a year (or after any big milestones) at your current income and recurring expenses. This is a time to check your current savings balances against upcoming needs and review debt payments before you decide to add another obligation.
If you run a seasonal business, you’ll want to do this even more frequently. A monthly cash-flow review is a good idea during volatile periods.
It’s also helpful to establish a long-term banking relationship with your local community bank because they’ll have familiarity with the economic patterns of the communities they serve. Community banking also connects deposits with economic activity close to home. Security State Bank Wyoming supports local lending along with community programs and events in the places its customers live.
Security State Bank Wyoming works with families and businesses in Basin, Gillette, Sheridan, Worland, and surrounding communities. Our customers know they can turn to the same bank for savings products and lending as their financial needs develop over time.
Put These Financial Planning Tips Into Practice
Don’t be fooled by the imaginary, far-off feeling of distant large-scale financial goals. These financial planning tips show how success is rooted in small, ordinary decisions. Let’s do a quick recap:
- Know how much income is available and when it arrives.
- Give predictable expenses a place in the budget.
- Maintain accessible savings for financial surprises.
- Choose longer-term savings tools according to when the money will be needed.
- Borrow when the payment fits both the purpose and the broader plan.
- Keep account security part of the routine.
- Revisit the numbers when your circumstances move in a new direction.
Security State Bank Wyoming has worked with generations of Wyoming customers through first accounts and home purchases. Our friendly bankers work closely with local businesses and agricultural operations through their own financial decisions. Let us help you organize the banking side of your plan around the priorities you have today — and the ones already taking shape for the years ahead.
