Millions of people are living paycheck to paycheck today. Without a plan of what to do with their money, a few dinners out and a couple of trips to your favorite store can keep you from reaching your financial goals. With some planning, smart priorities and definitely a dose willpower, you can really put your paycheck to work for you.
Here are 5 moves to make with your next paycheck to boost your financial health.
Retirement is an inevitable fact for most and you need to start saving now if you want to be able to enjoy it. Make your paycheck work for you by contributing to your 401k every paycheck. If your company offers a match, deposit at least that amount. One of the great benefits of a 401k is the pretax savings you get.
Budgeting out your paycheck is another key way of making sure you make the most of your hard earned money. This way you know exactly how much money you are spending and on what. When you plan out your paycheck, you have an easy roadmap on how to prioritize your spending, schedule bills and what your next month's budget will look like. If you do not like the idea of using a written budget, there are plenty of great mobile budgeting apps.
Debt is one of the first things you want to tackle when you get that paycheck. Start with the highest interest rate items and pay those first. This will help you save money in the long run. If you have any accounts that are past due, these should be a first priority too. When you start making moves to pay off your debt, you are helping out your credit score which is key to any long term goals you have set for yourself.
Unexpected things happen in life. You can lose your job, deal with unexpected repairs or have a medical emergency. For these reasons, it is important to start an emergency fund that is separate from your regular savings account. Your goal should be to try and have three to six months worth of living expenses. This will take time to build up so make sure every paycheck you are contributing to this fund.
Insurance is usually not a part of the pie when people are dividing up their paychecks. This could be a mistake as having the right policy for you is an important aspect of your financial well being. Serious injury and medical debt are some of the main things that can catapult people into bankruptcy.
Take the time to shop around for the right Insurance policy for you. Get multiple quotes and be sure to thoroughly read your policy and ask any questions you may have.