If you watched the video I was featured in on my brother’s YouTube channel, then you might’ve heard about how I save with every paycheck. After growing up and watching my parents work paycheck to paycheck I tried doing everything in my power to start saving money. I want to share with you how I save money with every paycheck and why it’s totally worth it.
Disclaimer: I am not a financial advisor nor should you take this as financial advice. This is just my opinion and some personal examples on what I do with my finances.
Here’s a list of everything I do in order to save money with every paycheck:
I put 10% of every single one of my paychecks into a long-term investing portfolio. If you’re new to saving and investing, then you’re probably thinking what the hell does that mean. Basically it’s an account that invests money into different stocks and bonds based on tons of research for you. This account is for your future self and is not to be touched until you are fully retired or have reached your long-term investing goals.
You probably have heard the phrase “saving now is worth more in the future” and it’s absolutely true. A dollar today is worth more in the future because of inflation. This means the money you put into this account now will continue to grow over time. So a dollar today is worth way more in the future!
I use Betterment to invest in my long-term investing portfolio aka my retirement. Betterment is a website that invests money into different stocks and bonds for me. All the money I invest into Betterment puts 90% in stocks and 10% in bonds for me. However, this isn’t a set number, you can change these percentages based on your preferences. This is awesome for people who don’t know much about the stock market or don’t have the time to watch the stock market. It uses algorithms and decades of research to invest money into different stocks and bonds for you!!
If you’re new to saving and investing, even putting aside a small 5% of your paycheck into a long-term investing portfolio will make a difference!! It’s the beginning of figuring out how to save money with every paycheck. As your paychecks start to grow, you can start putting aside more towards your retirement which your future self will thank you for!!
If you want to try out Betterment, then click here for 90 days of investing managed free.
Every paycheck, I put away 20% into a savings account. I NEVER touch this account unless I’m saving up to travel to a different country, make a a big purchase, or start a new business endeavor. This is an “in case” account that’ll be there for you if you really need the extra money. Otherwise save this to reward yourself with something.
There’s a difference between wants and needs and I only use this account for NEEDS. Like putting a down-payment on a car or house or making an investment on a business idea that can generate cash-flow. (Also in my opinion, traveling is a necessity because it’s a learning experience). Don’t spend this percentage you put into your savings account on wants.
After allocating money into these different accounts I start paying my bills. This includes things such as rent, food, credit card statements, and other things I chose to finance (for example, my laptop).
I am an avid fan of using a credit card, but I am also very discipline about paying on time and usually in full. It’s great to build your credit at a young age, which I’ve been doing since I graduated high school. This helps me pay off my bills while also building my credit score! Remember, you should only spend what you have on your credit card. DO NOT max out your credit card. If you are prone to over-spending then don’t use one!
Paying back your bills show be your top priority and then the percentages you allocate to your different saving accounts should follow. You do not want to fall into debt because its so hard to climb yourself out of a deep whole. Make sure you continue to pay your bills on time and faster if you can!
After paying my bills and before getting my next paycheck, I put whatever money I have left over back into my savings. This forces me to not spend money on things I don’t need and encourages me to save.
A lot of people overspend every week if they see they have money in their account. If your account is already low since you allocated money into your savings it’ll make you not want to spend!
Keep in mind as people’s salary rises, their expenses also rise! I know people who spend all their paychecks on a brand new nice car even though they had a car that get them from point A to B just fine. Keep in mind you don’t need to spend if you have more money! If your salary rises, the your savings should also rise!
These are just a few things on how I save money with every paycheck and I have seen a dramatic difference in my spending habits. Saving doesn’t have to be chore, I think of saving more as a mindset. A mindset where you are investing for your future self and your future family. Putting even a small percentage away in the future will make a difference and is something you should start doing ASAP!
I hoped this helped and I’d love to hear about how you save and why you save. Until then, I’ll see you in the next post!
Xoxo, Angelique – Ang Around The Globe
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