They include rent/mortgage payments, loan payments, and utilities. Their amounts don’t change (or change very little) and are considered essential. Fixed expensesare the purchases that you must make every month.

If you can’t remember where you’re spending money, review your bank statements, credit card statements, and brokerage account statements.

Expenses: List every purchase that you make in a month, split into two categories: fixed expenses and discretionary spending.

This can include paychecks, investment income, alimony, settlements, and money that you make from side jobs or other projects, such as selling crafts.

Income: List all sources of money that you receive in a month, with the dollar amount.

The tradeoff for earning more interest on your money is that high-yield accounts tend to require bigger initial deposits, larger minimum balances, and higher fees.

High-yield savings account: A high-yield savings account is another type of savings account that usually pays a much higher rate of interest than a standard savings account.

Lifeline and second-chance accounts, available at some banks, can help those who have difficulty qualifying for a traditional checking account. Others have monthly and other charges (such as for overdrafts or using an out-of-network ATM) based on, for example, how much you keep in the account or whether there’s a direct deposit paycheck or automatic-withdrawal mortgage payment connected to the account. You may be able to find a checking account with no fees. Account holders can withdraw funds via banks and ATMs, by writing checks, or using debit cards linked to their accounts. Money can be deposited at banks and ATMs, through direct deposit, or through another type of electronic transfer. Checking accounts are very liquid, meaning that they allow numerous withdrawals per month, as opposed to less liquid savings or investment accounts, though they earn little to no interest.

Checking account: A checking account is also a deposit account at a bank or other financial institution that allows you to make deposits and withdrawals.

They usually have some legal limitations on how often you can withdraw money, but they’re generally very flexible, so they’re ideal for building an emergency fund, saving for a short-term goal like buying a car or going on vacation, or simply storing extra cash that you don’t need in your checking account.

Savings accounts typically pay a low interest rate, but their safety and reliability make them a sensible option for saving available cash for short-term needs. Savings account: A savings account is an interest-bearing deposit account held at a bank or other financial institution.

Finances 101