In the banking world, there are 4 common types of bank accounts:

1. Savings accounts, the most basic type of bank account, provide customers with a safe place to house their money so that it is accessible in case of an emergency, but not as accessible as in a checking account. This helps to prevent you from spending money on unnecessary items. A big incentive in opening and using a savings account is that banks pay interest (a percentage of your total money that the bank pays you for storing it with them) for the money that you keep in your savings account. Interest rates, also called Annual Percentage Yield (APY), for typical savings accounts range anywhere from 0.01% to 1%. Check this out — a savings account holding $500, with a 1% interest rate would have a balance of just over $525 after one year. (thanks compounding interest!). While a $25 increase may not seem substantial, just remember, you didn’t have to work at all to earn it!
2. Basic checking accounts are another common type of bank account. These accounts are great for making easy, day-to-day transactions using your checkbook or debit card. Basic checking accounts usually offer no interest and are very easy to apply for. Some banks have limits to how many checks can be written per month and will also charge you for taking more money out of your account than you have in it; this is called an “overdraft” or “bounced check.”
3. Interest-bearing checking accounts (also called negotiable order of withdrawal (NOW) accounts) are exactly what they sound like; they are like checking accounts in almost every way, but they have the added bonus of paying you interest for the money in your account. Because of this added perk, these accounts are typically harder to apply for.
4. Certificates of Deposit (CDs) are basically a more intense version of your standard savings accounts. While you can take money out of savings accounts, even if it is more difficult than taking money out of a checking account, CDs require the account holder to leave their deposited money in the account for a set time decided by the account holder (usually more than 1 year). Because of this, there is a penalty for withdrawing money from these accounts before the time has expired. However, because the account holder will not be able to withdraw any money from the account during the set time period, the interest rates for CDs are substantially higher and can earn more money.

Depending on your bank, age and credit there are many more types of accounts available, but these basics are a great place to start. Getting familiar with these types of accounts and others is an important step in becoming financially strong.

To make a budget, follow these 5 simple steps:

1. Keep track of and add up all your total monthly income (the money you receive, whether it be a paycheck, a gift or another form of payment).
2. Keep track of and add up all your planned expenses (anything that you spend money on) for the month. An expense is anything from paying rent, buying groceries, going to the movie theater, paying phone bills or even the overpriced-but-worth-it pumpkin spice latte that you get every Monday morning.
3. Subtract your expenses from your income. This will give you the money you will have left over after paying all of your expected expenses. This number should be a positive number; if it is not, look at your expenses and consider eliminating some of them. For example, sipping that pumpkin spice latte every Monday may not seem as though it’d have a big impact on your finances, but skipping out on a $5 coffee every week will save you $20 each month! Still seems small? Think about this — skip the lattes for a year and you will have saved $240!
4. Once you calculate the cash left over after covering your expenses, create a savings pace. It is recommended that 10% of your total monthly income be put directly into a savings account or investment. It is also recommended that you put a set amount of money into your savings account from month to month.
5. Now you have your budget! All that is left is to follow it! It may be hard to stick to your budget, but know that even small moments of saving now add up to large amounts money over time.

Congratulations! You just received your first paycheck from your new job! Whether this is the very first time you have been paid or the 57,326^th, the feeling of getting a paycheck is certainly exciting. Your mind starts racing as you think of all the things you can spend this paycheck on: tickets to Taylor Swift’s 1989 Tour Concert, a selfie stick to get you looking better on Instagram, a celebratory Starbucks drink, or maybe even some flowers for your mom :). However, before even beginning to think of all the possible ways to spend your newly-acquired money, it is important to understand how to decode your paycheck. So check out the infographic below before you spend or, even better, save it!