Be Money Wise

If you have just landed your first ‘serious’ paying job, then it can be extremely tempting to grab that first paycheck and go on a spending spree. When you have little or no debts, and generally less responsibilities in rent and bills, then a disposable income can be extremely tempting to use. Be aware that the more you spend, the less you save, and the less you have for the future. Tip here: delay gratification, and ask yourself twice if you really need that 3^rd pair of sneakers.

Retirement

Yep, it may be DECADES away, but starting to put savings away for your retirement now is one of the best things you can do for yourself, and future family. Every little bit counts. With interest benefits, the sooner you begin a fund, the better off you’ll be in the long run.

Taxes

Get educated on how taxes work, how to do a basic tax return, and file and organize your documents early on. Especially if you are in a job that requires relatively simple organizing when it comes to tax time. This allows you to get your foot in the door without the overwhelm when it gets to more complex career tax systems.

Get Clear On Spending Habits

Be budget savvy. There are great applications online and for smartphones to allow you to track and categorise your spending. This gives you great insight into how much you are really spending and saving.

Auto-Save

Just as auto-debit payments make our life a ton easier in not having to complete this action multiple times our banking system each month, so too, we can take advantage of automatic banking in the form of savings. Settle on a percent that feels right for you, and commit to keeping this up. One of the great benefits of this is that you won’t miss the money if you don’t see it. When it automatically goes to savings, it feels less like you are taking from money coming it. Setting this up can be simple with your bank.

Keep Accountable

There are many different finance-tracking systems, from phone apps to computer programs and other budgeting tools. Some can be more in depth and complex for those who enjoy detail, and others can offer a basic template to track your income and expenses. When you are tracking your spending, often you will find that you are less likely to be frivolous with purchases and spending that you know you don’t need, or haven’t budgeted for.

Choose Cash

When consuming in the modern world, the ease of ‘pay as you go’ payments and online shopping with cards and other online hosts can make overspending TOO EASY. When you allocate yourself with a certain amount of cash for spending a day, or week, then the visual aspect of seeing the cash lower as you spend makes it much easier to motivate yourself to save.

The first step is to have a clear picture of how much money you are making and how much you are spending. Make a list of your income sources, such as weekly paychecks, and odd-jobs. Next write down your fixed monthly bills such as electricity, cell phones, and mortgage. Then create a list of other costs such as haircuts, clothing, gifts, even your daily coffee on your way to work. Small purchases do count. This will give you an idea of where your finances are at.

The second step is to set up a schedule where you pay yourself first each paycheck. You can set up an automatic deduction from you paycheck into a payroll savings plan, or an automatic transfer from your checking into your savings. This step is to ensure you created a routine for your savings. With just this step you will see your savings start to grow.

The third step is a bit intimidating, but don’t let that worry you. It’s not difficult. This step is learning about compounding interest. According to The Federal Trade Commission compounding interest is “the interest you earn on your initial investment plus all the interest that accumulates over time.” For savings accounts there are simple interest and Compounding interest. Simple interest is when you earn interest on your initial investment only. You want compounding interest. It’s that easy.

The fourth step is how to save when you start paying off your debts. This is your “extra” money that can be put directly into savings. For instance, when you get a raise, the extra money each paycheck goes directly into your savings. Or you pay off a credit card, the monthly payment you would have made also goes directly into your savings. To make it easy you can have this automatically transferred from your checking to your savings.

The fifth step is all about being creative in ways to save money. The money saved you can put, you guessed it, into your savings account.  Ways to save include going to local beauty schools to get your hair done. Often students will do this for free or at a reduced cost. Also, your local library has free books, music and DVD’s you can borrow. Another way to save is by bartering. You have skills and items that other people need, and other people have skills and items you need. It’s fun and free.

Finding ways to save money can be easy if you just set your mind to it. You can still enjoy your coffee on the way to work, try doing it once a week as a treat. You could be saving yourself a lot of money with this our bill pay service.