Early in your career

It's critical to get a handle on your day-to-day expenses and prepare for unexpected costs so you can save and invest for future goals.

Manage expenses

Help set yourself up for financial success by understanding the basics of budgeting and debt management.
BudgetingSlide 1 of 3
SpendingSlide 2 of 3
DebtSlide 3 of 3

Creating a budget

A budget can help you efficiently manage your finances, prioritize your needs vs. your wants and work towards your financial goals.
Click through these steps to help get you started.
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Calculate your net income

Your net income is your take-home pay — your total wages or salary minus deduction for taxes and employer provided programs like retirement plans and health insurance.

Using the 50/30/20 rule to balance your spending and savings

Many people divide their budgets according to the 50/30/20 rule, a common guideline for budgeting that organizes spending into 50% for necessities, 30% for wants and 20% for savings — including retirement, paying down debt and unexpected expenses.
Drag the slider to see what a 50/30/20 budget would be at different monthly incomes. You can also use our interactive worksheet to create your budget.
Bar chart titled "Find your 50/30/20 budget" illustrating Needs (50%), Wants (30%) and Savings (20%) based on monthly income (net income) break points of $1,500, $3,000, $4,500, $7,000. Monthly income of $1,500; Needs (50%) totals $750; Wants (30%) totals $450; Savings (20%) $300. Monthly income of $3,000; Needs (50%) totals $1,500; Wants (30%) totals $900; Savings (20%) $600. Monthly income of $4,500; Needs (50%) totals $2,250; Wants (30%) totals $1,350; Savings (20%) $900. Monthly income of $7,000; Needs (50%) totals $3,500; Wants (30%) totals $2,100; Savings (20%) $1,400.
This chart is a hypothetical example meant for illustrative purposes only. It does not reflect an actual investment, nor does it account for the effects of taxes, any investment expenses or withdrawals.

Spending analysis

In order to get a handle on your expenses, you need to know where your money is going. As a Bank of America client, you can get a breakdown of your spending, set a budget and track your progress.
Image of the Bank of America Spending Analysis tool showing an example of client spending in April 2021 at a total of $21,460.83 and in August at a total of $216.80 with $191.80 of that total being spent on Home & Utilities.

How does your spending measure up?

See what people like you are spending on their monthly expenses. Learn more with the Bank of America tool

Strategies for paying down debt

If you find yourself having to manage and pay off debt, you're not alone. While some types of debt can be an effective financial tool, other types like high-interest credit cards, can create a financial drain. It's critical to have a debt repayment plan and stick to it.
Watch this video to learn about different approaches for paying off debt — the Snowball Method (pay down smaller amounts first) and the High Rate Method (pay down your higher interest debt first) — and see which may be right for you.
Bar chart titled "Student Loans" illustrating average debt per borrower. Federal loan yields a lifetime total of $37,787 in debt. Private loan yields a lifetime total of $54,921 in debt. Bar chart titled "Credit Cards" illustrating average interest paid per person. The typical person will spend $279,002 over a lifetime on credit card interest.
Report on Average Student Loan Debt in 2021; educationdata.org/average-student-loan-debt; updated January 2023 (accessed February 6, 2023)
Lifetime Cost of Debt, Credit.com credit.com/lifetime-cost-of-debt (accessed February 6, 2023)

Did you know?

If you're looking to borrow money, lenders are looking at your credit. Bank of America can help you understand the ins and outs of credit, including how to build or rebuild your credit score. Learn more  about credit
Previous slide of 3 Slide 1 of 3: Budgeting Slide 2 of 3: Spending Slide 3 of 3: Debt Next slide of 3

Plan for the unexpected

Expenses like car repairs or a hospital visit can come up at any time. Building up your cash savings (sometimes called an emergency fund or rainy day fund) can help you prepare for these moments and give you some peace of mind.
Unexpected
expenses

Be prepared for emergencies

Financial emergencies happen, but an emergency fund and insurance coverage can help protect your finances and replace expensive belongings.
Click through these steps to help get started.
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Break it down

Start by saving small, manageable amounts — saving $100 a month would bring you to an amount of $1,200 after a year.

Did you know?

The time to review your home or renters policy is before you have a loss.

Save for retirement

Retirement may not be a priority quite yet, but it's important to start saving early — even if it's only a small amount at first. The more time your money has the opportunity to grow, the better prepared you'll be.
Retirement
savings

Make the most of your income

Especially when you're starting out, contributing at least enough to receive the company match for your employer sponsored retirement plan (e.g., 401k) may make sense, considering that future healthcare costs and inflation could add up to more than you think. If you can't contribute much right now, stretch as far as you can and commit to increasing your contribution when you get a raise or pay off a large expense.
Increasing your contribution by 1% or 2% can add up over time. If your employer's plan offers an automatic increase feature — which regularly increases your contribution rate over time — consider signing up. If you have maxed out your employer sponsored plan, you may be able to save more in IRAs.

Potential account balance ($40,000 salary)

Bar graph with y-axis showing "potential account balance" in $25k increments from $0 to $175k and x-axis showing 20 and 30 "years to grow." Below the graph is a graph key showing that dark blue bars represent a "4% pre-tax contribution rate" and that the lighter blue bars represent a "5% pre-tax contribution rate" based on a "$40,000 salary." Earnings with 20 years of growth are "$61,451" for a 4% pre-tax contribution rate, and "$76,699" for a 5% pre-tax contribution rate. Earnings with 30 years of growth are "$133,601" for a 4% pre-tax contribution rate and "$166,750" for a 5% pre-tax contribution rate.
Assumes a salary of $40,000, contribution rates of 4% and 5% with contributions made at the end of the month and a 6% annual effective rate of return. Hypothetical results are for illustrative purposes only and are not meant to represent the past or future performance of any specific investment vehicle. Investment return and principal value will fluctuate, and when redeemed, the investments may be worth more or less than their original cost. Taxes are due on withdrawal. If you take a withdrawal prior to age 59½, you may also be subject to a 10% additional federal tax, unless an exception applies.

Did you know?

If your company doesn't offer a retirement plan, you can still save for the future. Learn more  about retirement accounts

Invest for other goals

Investing can offer an effective way to work towards a variety of financial goals. Even if you're only investing a small amount to begin, starting earlier can have an impact.
Prioritize
goals

What's the difference between savings and investing?

Saving and investing can both play important roles in your finances. Saving is more appropriate for short-term needs like a home down payment, car purchase or any other expense you'll pay in the next 1-3 years.
Investing in stocks, bonds, mutual funds and ETFs, on the other hand, can be more appropriate for long-term goals of 3 years or more, because it gives your money the opportunity to grow and more time to recover from any market downturns. There is always the potential to lose money with investing, but with research and planning, you can find investments that offer you the appropriate amount of balance between risk and reward.
See more insights on how to get started.
Saving  information item 1 of 2  selected
Investing information item 2 of 2
Time horizon:
Short-term needs (1-3 years)
Holdings:
Cash in the bank; cash equivalent
Risk:
Your money may be FDIC-insured or protected by SIPC
Cost:
Few or no fees
Strategy:
Just find the best rate
Growth potential:
Determined by your interest rate over time
Time horizon:
Long-term plans (generally 3 years or more)
Holdings:
Stocks, bonds, mutual funds, ETFs and more
Risk:
You can potentially lose money
Cost:
Often has costs
Strategy:
Do research or get advice
Growth potential:
Determined by your choice of investments

New(ish) to investing?

Brush up on the basics with these insights and tips. Learn more  about investing basics

Managing through life's events

Throughout your life, you're going to experience important events — like getting married or divorced, having a baby, a job change — that will affect your finances. While some are planned, others are not. We're here to help you prepare for those critical times.
Work  topics
Your first job  topic selected Changing jobs  topic Job loss  topic Starting a business  topic

Your first job

Congratulations on reaching an important milestone. These resources can help you get your finances and working life off to a great start.
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Changing jobs

A job transition means considering how you'll handle employer-sponsored benefits like retirement accounts, along with insurance and other perks.
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Job loss

While it may be tempting to reach for retirement assets after losing a job, look for other sources that won't have an impact on your long-term plans.
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Starting a business

Starting your own business can be exciting and challenging. Learn the basics of planning, preparing and launching your new endeavor.
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Buying a home

Whether you're a first-time buyer or already own a home and are looking to refinance or make a move, there are a lot of financial considerations connected to homeownership. These resources can help.
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Buying a car

A new car could be one of the most expensive purchases you make. Before you commit to the first vehicle that catches your eye, think about how to plan to use and pay for it.
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Saving for a large purchase (travel, etc.)

Achieving a shorter-term goal like taking a vacation or buying a car calls for a disciplined savings approach. These tips and resources can help you get started.
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Getting married

Getting married or moving in together can be the start of an exciting new adventure. These resources can help you get ready for this new phase in your life.
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Starting a family

The cost of raising a child continues to increase. Learn how to prepare financially and protect your growing family.
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Getting divorced

Getting divorced can be a very stressful and financially complicated time. These resources can help you transition from "ours" to "mine" and "yours."
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Losing a loved one

The last thing anyone wants to prepare for is the loss of a loved one. But there are important decisions to make, and planning ahead can help make this time a little less stressful.
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Receiving an inheritance

Receiving an inheritance can open up new possibilities. These tips can help you prepare to manage an inheritance or unexpected new wealth.
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Caregiving

If you're faced with taking on the responsibility of caring for an aging or ill loved one, these resources can help.
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Put your plans into action ... ready to get started?

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Learn about our other life stages

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Investing involves risk including possible loss of principal. Past performance is no guarantee of future results.

Investments have varying degrees of risk. Some of the risks involved with equity securities include the possibility that the value of the stocks may fluctuate in response to events specific to the companies or markets, as well as economic, political or social events in the U.S. or abroad. Bonds are subject to interest rate, inflation and credit risks. Investments in foreign securities (including ADRs) involve special risks, including foreign currency risk and the possibility of substantial volatility due to adverse political, economic or other developments. These risks are magnified for investments made in emerging markets. Investments in a certain industry or sector may pose additional risk due to lack of diversification and sector concentration. There are special risks associated with an investment in commodities, including market price fluctuations, regulatory changes, interest rate changes, credit risk, economic changes and the impact of adverse political or financial factors.

Asset allocation, diversification, and rebalancing do not ensure a profit or protect against loss in declining markets.
Footnote 
You have choices about what to do with your employer-sponsored retirement plan accounts. Depending on your financial circumstances, needs and goals, you may choose to roll over to an IRA or convert to a Roth IRA, roll over an employer-sponsored plan from your old job to your new employer, take a distribution, or leave the account where it is. Each choice may offer different investment options and services, fees and expenses, withdrawal options, required minimum distributions, tax treatment (particularly with reference to employer stock), and different types of protection from creditors and legal judgments. These are complex choices and should be considered with care. For more information visit our rollover page or call Merrill at 888.637.3343.
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Investing in securities involves risks, and there is always the potential of losing money when you invest in securities.

Asset allocation, diversification, and rebalancing do not ensure a profit or protect against loss in declining markets.
Merrill, its affiliates, and financial advisors do not provide legal, tax, or accounting advice. You should consult your legal and/or tax advisors before making any financial decisions.

This material is not intended as a recommendation, offer or solicitation for the purchase or sale of any security or investment strategy. Merrill offers a broad range of brokerage, investment advisory (including financial planning) and other services. Additional information is available in our Client Relationship Summary (PDF).

Merrill Lynch, Pierce, Fenner & Smith Incorporated (also referred to as "MLPF&S" or "Merrill") makes available certain investment products sponsored, managed, distributed or provided by companies that are affiliates of Bank of America Corporation ("BofA Corp."). MLPF&S is a registered broker-dealer, registered investment adviser, Member Securities Investor Protection (SIPC) popup and a wholly owned subsidiary of Bank of America Corporation ("BofA Corp").
Merrill Lynch Life Agency Inc. (MLLA) is a licensed insurance agency and wholly owned subsidiary of BofA Corp.

Banking products are provided by Bank of America, N.A. and affiliated banks, Members FDIC and wholly owned subsidiaries of Bank of America Corporation.

Investment products offered through MLPF&S and insurance and annuity products offered through MLLA:
Are Not FDIC Insured Are Not Bank Guaranteed May Lose Value
Are Not Deposits Are Not Insured by Any Federal Government Agency Are Not a Condition to Any Banking Service or Activity


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