Looking to Build Wealth? Start with a Budget—Here’s Why

Nearly one in three Americans have less than $500 set aside to cover unexpected emergencies, according to a survey by HomeServe. This isn’t necessarily because we are neglectful; for many of us building up our savings can be a challenge. Our paycheck comes in, we pay our bills, we buy gas and groceries, we may go out to eat, and then we wait for our next paycheck. To escape the paycheck-to-paycheck cycle and build wealth, consider creating and following a budget.

It’s hard to understate the importance of budgeting. Here are a few of the ways budgeting can benefit you, as well as some of the challenges that budgeting helps you avoid.

The Benefits of Budgeting

The Benefits of Budgeting

Whether you use an app, a spreadsheet, or pencil and paper, budgeting can help you plan and track your spending. Some of the benefits of budgeting include:

  • Knowing your income and your expenses. By taking a close look at your income and your expenses, you’ll have a better understanding of where your money actually goes. One approach to starting a budget is reviewing your spending by using your checking account statements or your bank app. Categorize your spending using broad categories such as groceries, gas, mortgage or rent, dining out, etc. You may be surprised at how much you spend in some categories.
  • Making informed decisions. Once you know how much you have coming in each month and your expenses, you can make informed decisions about where to spend less, where to spend more, and whether you should consider bringing in additional income. For example, if you don’t already have an emergency fund, you may want to start building one. Once you have some emergency savings, you may want to start paying extra on your debts until those are paid off. From there you can start building up your savings even more, including your retirement savings or savings for other plans to build wealth such as buying another property or starting a business.
  • Clarity around your goals. Budgeting might sound like a chore, but it’s actually an opportunity to define your goals and what it will take, financially speaking, to make those goals a reality. For example, if there is a dream vacation that you’ve been wanting to take, consider how much money it will take to fund that vacation and when you’d like to have that money. Plan that amount into your budget.
  • Flexibility. A budget is a tool. It’s not set in stone. Some of your expenses are fixed, of course, but if things change, you can make adjustments. For example, if you plan to put $100 toward your vacation, but you get a flat tire and to buy a new one, take the money from your vacation budget and try to make up for it later in the month or the next month.

The important thing is that you can make informed decisions based on your spending patterns and your goals. Emergencies are easier to handle, and you can find ways to make small changes, like packing a lunch for work a few days per week, that make a big impact on your overall budget.

Unexpected Ways Budgeting Can Help You Save Money

Unexpected Ways Budgeting Can Help You Save Money

As you understand the importance of budgeting, you’ll naturally start to make changes to meet your budgeting goals. Budgeting can help you save money in some unexpected ways, though. For example:

  • Late fees: A $35 late fee might not seem like much, but it adds up and eats into your budget. With the budget, you can get a handle on how much income you have and when you get that income. Based on those dates, you’ll know when you need to pay your bills so that the payments arrive on time and you don’t get charged late fees.
  • Overdraft fees: If you spend more than you have in your checking or savings account, you may be subject overdraft fees. The fees may include a one-time overdraft fee as well as daily or periodic fees for each day that you’re overdrawn. Overdraft fees are typically around $35 per item. So, if you overdraft on three charges, you could be facing as much as $100 in fees. With a budget, you can plan and monitor your spending to ensure that you don’t overdraw your checking account. Many banks, including Arthur State Bank, allow you to link accounts so that money is transferred from another account into your checking account if you accidentally overdraw.
  • Poor credit scores and credit history: With the budget, you can make smarter financial decisions. For example, you can pay down your credit card balances, which can help improve your credit scores. You can avoid late payments or missed payments, which also hurt your credit score and your credit history.

Ultimately, perhaps the most significant benefit of budgeting is the peace of mind that it can bring. You can start to build wealth and focus on your long-term goals without the stress of wondering where funds will come from if there is an emergency.

Your Partner in Wealth

Your Partner in Wealth

At Arthur State Bank, we believe in personal relationships. We’ve been serving South Carolina since 1933, and we weathered every economic storm along the way. Contact us today to find out more about budgeting and how you can build wealth for yourself and your family.

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AnnualCreditReport.com is the only source for free credit reports authorized by the federal government. Every 12 months, you can get a free copy of your credit report from each agency.

Your credit report has your credit history for all of your credit accounts as well as any credit inquiries and public record court information such as collections. In addition, the report provides personally identifiable information such as your name, address, and employment.

Be sure to carefully review all three reports to identify any problem areas that you may need to clean up prior to applying for a mortgage. If there is any incorrect information, follow the reporting agency’s rules to correct it or add a notation to the report to explain the situation.

Your FICO Score is a score combines data from several areas include payment history, the amount owed, length of credit history, new accounts. Many lenders use this score as a guide. This score is not provided as part of the free annual credit report.

Learn more about how your credit score impacts your ability to secure a loan.


Couple looking over finances

Primary considerations for setting your housing budget require an assessment of your income, debt and current savings for the down payment on the home. The following are generally recommended guidelines; however, you should meet with an Arthur State Bank lender to get personalized mortgage information.


Couple meeting with lender

The pre-qualification/pre-approval letter is included with any offer you make on a house to inform the seller that you have met with a mortgage lender and you are prepared to make an offer. The letter states that based on certain assumptions, the bank is prepared to lend you up to a specified amount of money for a home mortgage.

When choosing a loan officer, we recommend going local to work with someone who understands your community’s real estate market. This blog on first-time home purchases includes questions to ask your lender that may be helpful when preparing for your meeting.

Helpful Resources:


Realtor shaking hands with a client

When a house is sold, the seller typically pays real estate commission to both the listing agent and the selling agent. It is extremely beneficial for the buyer to use their own real estate agent. Loan officers can often recommend selling agents in the area; ask your officer about realtor referrals when discussing your loan.

A good realtor will know the local market and can help you find an ideal home based on your budget, location and desired features. During your search, understand that you will most likely need to compromise on some items, so it’s important to identify your critical needs versus your wants.


Couple searching online for a home

Additionally, when you start with the house search and work backwards, homes can often go off the market while you’re completing steps 1-4. While browsing homes immediately can be tempting, we recommend following these steps in order so that, once you find your dream home, you’ll be well-positioned to take action immediately.

When you find the home you want and you think you are ready to put an offer on it, you will want to make sure you have all the information you need to make a solid offer.

  • Evaluate the neighborhood.
  • Drive by the house at different times of the day.
  • Examine how other houses in the neighborhood are maintained.
  • Consider any potential traffic or other disruptive noise.
  • Is there ample parking for you and visitors?
  • Read the details in any Homeowner Association agreements (HOA fees and rules).

Make sure to do a preliminary check of house details:

  • Check the water:
  • Does it have good pressure?
  • How long does it take to get the water hot?
  • Is it well water or city water?
  • Turn light switches on and off.
  • Open and close doors and windows to make sure they work properly.
  • Review previous utility bill expenses.
  • Consider the property tax bill.


Family meeting with realtor at new house

When writing an offer contract, be sure to pay attention to all of the details.

Offer Price:

Your agent should do a market analysis that pulls data on recently sold comparable houses. The best comparisons will come from the same neighborhood.

If you are asking for the seller to pay some of the closing costs, remember that this cost plus the sales commission determines the net amount you are offering the seller for the house.

Work with your agent on your negotiation strategy. There are many things to consider, such as how badly you want this particular house, whether it is a buyer’s or seller’s market and an assessment of the seller’s motivation to get the property sold.

There isn’t one best strategy.

Be sure to document in writing everything you want included with the house, such as appliances, etc. Your agent should guide you through the contract step-by-step.


  • Home inspection.
  • Mortgage.
  • Final walk through (24 hours prior to closing).

Proposed closing date. Typically, this is 30-45 days from an accepted offer.

A good-faith deposit is required for the offer. This is typically between 1-10% of the purchase price of the house. The deposit is kept in escrow until closing and the money is applied to the purchase price of the house at closing. If the house does not close due to one of the contingency clauses, the buyer receives their money back. However, if the buyer decides not to close on the property, the seller may get the deposit money.

Attach your pre-approval letter to the offer.


Two people in professional meeting

The clock starts ticking for everything documented in the contract, including mortgage application, inspections and closing date.


Woman advising other woman on mortgage application

You will need to decide which mortgage to select prior to the application.

Plan for the following potential fees:

  • Application fee (many banks and mortgage companies charge an application fee; however, there is not an application fee at Arthur State Bank).
  • Credit check.
  • Appraisal (may be paid at closing).
  • Loan origination fee (paid at closing).

Once you have approval for your loan, make sure you don’t change anything that will impact the status of your mortgage. Banks do a final check on credit and jobs just prior to closing, so now is not the time to change jobs or make another purchase on credit such as a car or furniture.


Home inspector going over findings with home owner

Depending on the size of the house, an inspection can cost on average between $300 to $1000.

Many real estate contracts specify how problems uncovered in the inspection will be resolved, up to a certain dollar amount. Should necessary repairs exceed that amount, the buyer has the option to cancel the contract without penalty and receive their deposit money back. Another option is for the buyer and seller to renegotiate who will pay for additional repairs.


Woman happily holding keys to her new home
  • Homeowner’s insurance is required by the lender prior to closing on the loan.
  • Turn on utilities in your name, effective the closing date.
  • Change your address with the U.S. Postal Service.
  • Make moving arrangements.

Three days prior to closing:

  • You should receive your final Closing Disclosure from the closing agency. The final Closing Disclosure shows a column for the seller and a column for the buyer. All closing charges and credits for both the seller and the buyer are documented in the closing statement.
  • Review the closing statement for accuracy prior to coming to closing.
  • The final amount in the buyer’s column shows you the amount of money you need to pay at closing.

The closing office will provide specific payment instructions. Closing funds have become recent targets for cybercriminals. If you are asked to use a wire transfer, call the office and ask to speak to someone you have been working with to double-check the instructions.

Closing day:

In South Carolina, the closing will usually take place at the attorney’s office. Everyone signing for the mortgage must be present to sign the closing paperwork. Make sure you bring the following:

  • Cashier’s check or proof of payment for wire transfer.
  • Driver’s license.
  • Checkbook, just in case there are any additional items that were not on the closing statement.

Be sure to understand this information:

  • How and when you will pay:
  • Your mortgage.
  • Your property taxes.
  • Your homeowner’s insurance.
  • Any HOA dues.
  • Who to call with any questions.

The best practice is to go through the homebuyer’s roadmap in this sequence. However, if you jumped ahead early in your journey, just circle back to address the steps you missed.

Arthur State Bank’s loan officers are closely tapped into local real estate markets and experts at helping clients get what they need on terms that work for them. We also offer mortgage specials for first-time homebuyers.

To start planning your journey to your dream home, try out our mortgage calculator. If you’re ready to talk to a loan officer, contact Arthur State Bank to request personalized mortgage information today. Don’t forget to ask about our first-time homebuyer offer.