Does this sound familiar?
“Once again it’s the end of the month and I’m broke.
I don’t have any idea where my money went. I planned to save whatever money was left over at the end of the month but there isn’t any left over.
Maybe next month there will be.”
Ugh, how does this keep happening? I mean you are watching every single dollar that you spend, right?
Well, if you’re anything like me, you probably weren’t. I used to do this all the time. I’d look at my bank statements and ask questions like:
When did I buy that?
And why did I buy that?
Is it too late to take it back?
Because I’m pretty sure I don’t need it.
And that’s the trouble with flying by the seat of your pants when it comes to your money.
When you don’t have a plan for your money you better believe that the grocery store, the mall, and Amazon have a plan for your money.
Trust me, girl, they got you especially when you don’t. Let me explain why at the end of the month you have no money left over to save for yourself.
Why you have no money at the end of the month
There are actually several reasons why you have no money at the end of the month to save. One of the reasons is that you think you don’t need a plan.
And the reason why you think you don’t need a plan it’s because you always say to yourself “oh next month I’ll do better” but when you don’t make a plan more than likely you won’t.
It’s kind a like that diet that you’re so sure you’re gonna start tomorrow and then 100 tomorrow’s from now you still haven’t started.
That’s kind of how budgets go. So you say yeah I’ll do it at some point probably maybe and you never do. Do you know why you don’t do a budget?
Because budgets suck.
But even though budgets suck and they do you have to have some sort of plan in place. If you want to manage your money and have money left over at the end of the month you have to have a plan.
That can be a budget. it can be a cash flow plan. It can be somewhere in between but the bottom line is you have to have some sort of plan outline theory thesis or something or your money will be gone.
And your savings will not grow. It’ll be more stagnant than moss in a swamp.
It’s really that simple I didn’t say it was easy but it’s that simple. So now let’s talk about what you should do. These are three things you should do before you get your paycheck.
3 Things That Should Happen Before You Get Your Paycheck
1. Have Your Retirement Automatically Deducted
Before you get your paycheck, you need to make sure that part of your paycheck is automatically being deducted and put into a retirement account.
Now, this can be done by your employer or you can set it up personally using the broker or the bank through which your retirement is set up.
The bottom line you must have your retirement savings automatically deducted from your paycheck.
Studies show that when an employer automatically enrolls their employees into their retirement program just around 80% of them build their retirement account.
So that means that the other 20% of employees see that their retirement this is growing and they say naw I’d rather have the money now lol.
Don’t be in that 20%.
If you have an employer that’s willing to automatically enroll you in the retirement plan then thank God for it and more than likely you will not miss that money.
However, you will miss it 30 40 years from now when you don’t have it when you’re about to retire.
And if your employer does not automatically enroll you then you need to enroll yourself. You get to decide how much you want taken from your check every pay period.
Say for instance you could have $25 taken from your paycheck every pay period.
I may not seem like a lot but if you start early it’ll grow over time and the compound interest will make your retirement grow by leaps and bounds.
It’s best to just start somewhere and then as your paycheck grows the amount you put aside for retirement can grow.
2. Have Your Savings Automatically Deducted
In addition to your retirement savings you should also have your own personal savings account and have money automatically deducted from every paycheck.
Why? Because when it’s done automatically you know that it will get done no matter what. No excuses.
It’ll just get done no matter what. You can just count your savings deduction as one of my monthly bills.
This is especially important when you are building an emergency savings fund. Automatic deductions is one of the fastest ways to build your savings.
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3. Create A Budget For Now Until You Get Your Next Paycheck
The last thing you should do before you get your paycheck is to make your budget or your plan for how you will spend your check.
Why should you do it before you get your paycheck?
I find that if I wait until I get my paycheck to do my budget, I usually wind up not doing a budget at all.
Then I end up in the same kind of situation that we discussed earlier when I don’t know where my money went by the end of the month.
Whereas doing my budget before I’ve received my check puts me in that proactive frame of mind that I need to spend my money wisely.
Plus, if you don’t like the idea of having money automatically debited from your account (this is especially true if your paycheck varies week to week) then this what you can do:
Go ahead and schedule a bank transfer to your “offshore account” meaning a bank account with no debit card attached to it.
You can schedule this for a day after your check has been deposited to make sure your check is fully cleared.
And why should you use a separate bank account?
Bank accounts that don’t have debit cards attached to it are more likely to build wealth because you aren’t using it to buy groceries, gas etc. Make sense?
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