When Barbara graduated from high school, she went straight to work making an hourly wage. Although her paycheck was pretty slim, she knew she had to start saving a little bit each month.
To make this happen, she put herself on a spending plan (aka, budget), analyzing her spending to see where she could cut back and putting any leftover funds in savings.
Barbara has adjusted her spending plan as her income increased and her life circumstances changed – such as when she got divorced and when her son moved out of her house.
Barbara has a steady job where she puts away money for her retirement in a 401(k) plan. In addition, she has $50 each month automatically transferred from her checking account into her savings account; she watches her monthly expenses and she uses credit to help cover gaps.