One factor that employees consider when looking for a new job is their compensation. Before accepting any offer, you should strive to stretch your first paycheck during negotiations so it’s as big as possible. At a minimum you should always ensure your take-home pay covers the rent, utilities, food, and other expenses.
Clearly, you have thought about how you’ll spend your paycheck even before it arrives. But some people have a habit of spending more than they have and finding themselves short a few days later. To help you stay on budget, we’ve compiled a list of budgeting tips to help you make the most of your first paycheck.
Save Before You Spend
According to the 50-30-20 rule, which corresponds to a standard budgeting method, you should spend no more than 50% of your income on necessities, 30% on wants, and 20% on savings and investments.
Everything from layoff and hospitalization to car breakdowns is possible in life. Having a financial cushion to fall back on can help you manage many potential problems because we can’t possibly anticipate everything that is ahead.
As a bonus, your savings can grow passively through interest or dividends from a savings or investment account. Moreover, if you give yourself a savings goal and succeed in achieving it, you’ll feel fulfilled.
To get started, open a separate savings account. This reduces the possibility of you having to dive into your savings to pay everyday expenses.
Track Overtime
Most workers put in their full eight hours every day. But when that isn’t enough, they often try to stretch their paycheck by clocking extra hours.
The most obvious benefit to keeping track of time is accurately calculating hourly wages. However, even though working extra hours can be beneficial in many ways, it’s essential to weigh overtime pros and cons before committing to additional working hours.
In addition, by keeping a log of your daily working hours, you can better manage your schedules to stay within your available time each week. Consequently, you’ll have a healthier work-life balance.
Keep a Spending Log
You can stretch your paycheck by creating a workable budget if you have a daily spending log. It’ll help you determine how much money you have coming in each month and how much money you’re spending.
Keeping track of your day-to-day expenditures will help you recognize patterns in your spending habits and behaviors (both good and bad) and determine where you could make adjustments.
There’ll always be instances when you forget an approaching bill, put off making a financial decision, or otherwise fail to plan to avoid incurring a financial penalty. Keeping a spending log will make you less likely to neglect or ignore your financial responsibilities.
Lastly, a spending log is a tool to record your daily activities, allowing you to reflect on your progress and successes over the month.
Bring Your Lunch to Work
By bringing your own lunch to the office, you’ll avoid waiting in lunch lines with those who need to buy. This means you can take it easy and savor your meal without feeling rushed.
Not only that, but the price of a single meal with delivery might match the cost of food for a week’s worth of lunches at work. To convince you more, a survey of 437 persons in the United States showed that those who cooked most of their meals at home spent less money eating out, less money on food overall, and ate healthier diets.
Avoid Online Shopping
Online stores and mobile shopping apps make it incredibly convenient for you to keep making purchases. Of course, online markets benefit – but you may end up struggling financially later on if you don’t break that habit.
If you’re trying to cut back on online purchases, one strategy is to remove your credit card details from your browser. In addition, you may find yourself prompted to go shopping after using social media sites or applications. If you don’t want to see certain brands in your feed, unfollowing and blocking them can be the best option.
Automate Your Finances
Another way to ensure you’re stretching your paycheck is to save without ever having to think twice. You can do this by automating your savings. How? By setting up a regular transfer from your checking to your savings account!
While we’re on the subject, you might consider setting up automatic payments for your bills. Then, you can avoid late fees charged by companies by making your payments well before the due date. Also, when you consistently save a fixed amount of money each month, you can build an emergency fund. The beauty of emergency funds is that they can cover unexpected expenses without throwing your budget off balance.
Final Thoughts
Although creating and sticking to a savings and budgeting plan while working can appear overwhelming at first, a clear target can be a great source of motivation. Yes, you may have to make sacrifices and adjustments to your preferred lifestyle. But doing so will pay off in the long run and set you on the path to financial independence.
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