- Personal Finance
Use Your Paycheck Wisely
Wow, I Got Paid!
Don't you wish that everyone got paid the same amount of money?
Your Very First Paycheck (Or Ninty-ninth), Now What?
You got the job, you worked hard and learned fast. Now, you get your paycheck and you want to celebrate! Of course, first and foremost you should be able to enjoy your money and your freedom, or independence. However, freedom comes with a price. If you want to be free, without someone else telling you what to do in your own home, then you need to use your money wisely.
First things first-I am not trying to tell you what to do or how to do it. I am attempting to pass on some financial tips that I have learned during my sixty-years of experience. We all want to go out and have fun that first day. I did. But my situation, no car of my own, held me back. So, I saved the money and when I had enough, I got my car. That was my first lesson in using my paycheck wisely.
The items listed below will help you to keep as much of your money as possible so you can get out there and dance, party, see a movie, or go out with your friends for a night on the town. Sound good? Then read on and take notes (just kidding). Then follow through and enjoy the freedom having money gives you!
Create A Simple Budget
Add together everything you pay for in an entire month including gas, food, lunches, entertainment, rent, electric, uniforms, clothes for work, etc. Divide this amount by four and that is the usual amount you should put aside. In fact, if you add 10% of your entire check to that amount you will build a nice nest egg for those special events. And, when the bills come due, you have the money to pay them.
Money, Money, Money
That paycheck looks real good, but 'don't spend it all in one place'. Do you remember that saying? Another would be 'don't put all your eggs in one basket'. Basically, these sayings are nothing more than a cute way to say save your money for 'a rainy'day'. You create a budget, put aside the amount needed, and then use the rest for whatever you wish. Be sure your budget includes things like food, laundry, gas and lunch.
Here We Go
- When bills come in, check for accuracy and then pay them from your money that you put aside using your budget.
- If you wait until you ‘feel like it’ to check or to pay the bill it may, and usually is, late. Paying late means the company will charge you a late fee which will cost you more money.
- If you do not check for accuracy, you risk the possibility that there are errors. Errors mean added charges or higher interest. There is a very short window during which you can report an error. If you wait too long, the charge will become yours whether you made it or not. Also, companies are run by people and people are not perfect. Errors occur and they will not be fixed if you do not report them.
- Items that may cause errors on your bill (besides human error) are:
- Anyone who handles your card or account can put a second charge (or more) on the bill because they have your information.
- Theives have developed many ways to get their hands on information on-line. They could, if they got your information (one part is all they need), then they charge huge amounts. Many banks will notify you if the item is larger than your usual, but some don't. If you wait, the charge becomes your charge no matter what.
- Clerks or wait-staff accidentally putting in the wrong amount when they run your charge.
I cannot possibly list all of them especially since new ones are created daily. So be sure to check.
Credit Card And Debit Bills Should Be Checked
Put Your Money Aside, Or...
You might spend all of your money on roses for your girlfriend for her birthday and forget to put some of the money in the gas tank so you can take her out to dinner (did you put the dinner money aside or will she have to pay?)
Your Gas Tank Can Save You Money
Yes, I said the gas tank. Using your gas wisely will save you time and money.
- Keep your gas tank at least a quarter of the way filled. This is so that should you forget to put gas in, you at least have a fighting chance of reaching a gas station before you run dry.
- A half a tank is even better especially in the winter (because the car is heavier and you can ‘warm it up’ without running out of gas).
- The lower you run your gas tank, the closer you get to all of the sediment, rust, oils, etc. that falls to the bottom of every gas tank. When this stuff is run through your engine you can get blocked gas filters, gunked fuel injectors, gunk in the spark plugs and a car that will cost an arm and a leg to get fixed.
- Keep your tires at the suggested pressure for both winter and summer (your owner's manual should tell you what that would be). This ensures that you get the best mileage from your tank.
- Keep your tires even by replacing them all at once and rotating them regularly. This will help you by giving you better gas mileage and a more even wear on your tires.
- Travel at a steady pace because stop and go traffic means you vehicle needs to use more gas to start up again. The best place to do this is, of course, the highway where you can travel at a steady pace with few stops. I like to use the cruise control to keep me at a steady speed as I travel.
Your Gas And Your Savings
Would you trust a mechanic that said your car needed thousands of dollars in repairs even if you knew the car was running well?
Did I Hear: "I Am Not A Good Self Mechanic"?
I know, neither was I. I couldn't tell you the difference between a spark plug and a cigarette lighter when I first started out (I know most cars don't have cigarette lighters anymore, told you I had experience). But I read my manual when I wasn't certain what might be wrong. I went to the library to find the specs for my car when I bought it used (you can use the internet now). I also asked family members that worked on cars for advice. Then I put my information to the test and found it worked very well thank you. You can do it too.
My Food, Don't Touch!
Make your own meals as often as possible and don’t buy frozen meals or eat out. By making your meals yourself, you save money. Eating out, while always a pleasure, costs, on average, fifteen to thirty-five dollars per person depending on where you eat. Cooking at home costs perhaps five dollars per person including the utilities used to cook and clean. Frozen meals are three times what you would spend for cooking at home and the food is not very good-besides most frozen or canned items are loaded with sodium, preservatives, and other chemicals. Also, when you buy a pre-made meal, you are generally paying more for the company logo than the food. A quick note--if you make a lot of your favorite meal, you can divide it into meal portions and freeze them for quick meals during the week.
PS: Don’t give in to the temptation to buy that I-pad you’ve been wanting because you have their money and you figure you will pay it back with next week’s check. Remember, no matter how good your intentions, it will rarely get paid back. Instead, save the money, a little each week until you have enough.
Sharing Living Expenses
Living in an apartment and paying rent, electric, cable, internet, etc. can get extremely expensive. If you drive to work, that becomes another expense. Ride the bus? That costs as well. But if it costs you eight hundred dollars to live alone, it might cost you four hundred to live with a roommate. The more roommates, the less you have to pay. And the less they will have to pay for their room.
Be the one to collect the money for the bills so that you know they are getting paid. The temptation to use the cash for other things and ‘pay’ it back with the next paycheck is sometimes overwhelming but the money rarely gets paid back, so don't let them pull that on you.
If you collect from the others and make the payment immediately, not only will the bill be paid and you will not lose money, but you will become known as trustworthy (sorry, had to put that in there). And, you will know who the dead-beats are and can eliminate them from the process so that you and your fellow housemates are not footing the bill for someone who never seems to have enough money.
You Collect And You Pay The Bill.
Don't Let The Devil Change Your Saving Habits With Temptation
Make A Budget You Can Stick To
It might be hard at first because your friends are going out for pizza and beer and you really want to go but you didn’t put money aside for that…….Or you really want that new game that just came out but you don’t have enough savings for it yet………OK, so you might need to break away once in awhile, but do your best to stay on track the rest of the time. We have to break away every now and then or we become like a miser and fear giving a penny to the poor. But don’t do it often enough to affect the money you have worked so hard to save for the bills. Instead, put extra aside for those little flings that you have once in awhile. That way the bills will still get paid and you won’t become a miser!
The Credit Card Biz
The offers look good, and you feel they are telling you the whole story, but once you get the card, you learn the hard way that they are only out to get money from you no matter what. Annual Fees, for instance, often catch you off guard by being charged when you are close to your credit limit. That means fines for going over the limit and extra interest on the fee amount because it is now a part of your balance. The fees need to be paid every year. How can anyone remember that in one year that money will be charged on the account. PS: Companies that let you use a credit card pay a fee to the credit card company for every transaction. Boy these guys really have it made!
Are they worth having? The credit card companies charge you outrageous amounts for interest and there is a fee for everything--charging, not charging, charging at gas stations, charging out of state, getting a cash advance, paying late, paying too early, not paying enough on the charges, missing a payment, the list goes on. Plus, after they have finished charging you all of those fees and the interest, they give you a minimum amount to pay each month that barely makes a dent in the principal amount (the actual amount you have charged) but always pays the extra fees and charges. This way they get their money and you go broke! Nice gig they have isn't it?
If you wish to build your credit rating, however, you need something that will start to show that you are not a dead-beat. To do this, you usually need to get a credit card. The best cards to get for building credit are:
- Guaranteed Credit Cards from a local bank- With this type of credit card, the bank has you deposit an amount into an account and that amount becomes the credit you can use on your card. As your record gets better, your credit will rise.
- Gas Credit Cards- they have smaller limits and only allow you to purchase gas at their stations, but that means you will have a smaller payment schedule which will make it easier to pay.
- Department Store Credit Cards-You used to be able to get them from everywhere, but now you have to be careful. Try an online account credit card from a site you trust. I use PayPal for all of my transactions and they really are trustworthy. Once you have established yourself as their client, they will often offer you a credit card from them. Or you can ask if they have one that will fit your budget.
The Credit Card Biz
Use The Unit Price To Compare
A unit price tells you how much per unit you will pay for an item. Bulk items are usually cheaper by unit price. To calculate a unit price you take the amount of an item like a 4 pack of batteries [$3.00] and divide by how many units [in this case 4] and that is your unit price. So in this case you are paying 75 cents for each battery. Most stores have a unit price somewhere on their price tags.
Reduce And Save
There so many ways you can save without it costing you a dime. Try these tricks for saving.
- Use store cards, price comparisons and coupons when shopping; coupons can be printed from the internet.
- Check your bank statement for hidden fees and change banks if need be to stop or reduce these charges.
- Turn off everything you are not using (get a surge suppressor for everything and turn it off when not in use so those sneaky gadgets don't keep drawing power): biggest culprit--microwave-it draws power to keep the clock set and running and it is always 'ready' to work because it draws power to stay ready to run.
- Lower your heat and put on a sweater. Putting your heater at a lower temperture, even one degree will help. It will lower your usage and thus your cost. Sweaters, blankets, slippers, and PJ pants were made to help keep you warm, right?
- Fill in cracks and cover windows and put down draft-snakes in front of all outside doors.
Do whatever it takes to reduce what you have to spend each month and you will have more for fun spending. Every penny counts, so save your change in your budget fund as well.
Save Your Change
Use Your Own Products
Save With Your Laundry
Everyone has laundry. We need to have them washed every week. It is convient to have a laundromat doing your loads for you, but at what price. Here are a few tips to help you reduce some of your laundry costs:
- Fill the washer as full as you can without stuffing. The more you wash in one load the more you save, but if you pack it too full, the clothes won't get clean.
- Fill the dryer in a way that will allow the clothes to move around freely (usually filling a dryer about half full is best). This helps to dry them faster.
- Bring your own detergent, softener and dryer sheets to the laundromat. The ones available in their machines are very expensive and usually only do two loads.
- Do your own laundry, don’t pay the Laundromat to do it for you. They will charge a lot more money than it would cost you to do your own.
- Bring your own drink and/or snack. Theirs will cost you a lot more than if you bring your own.
- And, for comfort reasons, try to find one that has a restroom.
Here are a few ideas on things you can do to reduce how much laundry you have:
- Sometimes you can wear things more than once--PJ's, outer clothes like sweat shirts and sweaters, etc. Use common sense with this one, if you sweat a lot or did something extra strenuous, you might not want to wear the clothes a second time because of the odor they will retain. If you spill something on the clothes, then wash them right away.
- Wash small things by hand and hang them up to dry. Underwear, socks, etc. can all be easily washed in a sink and hung on the shower rack to dry. This will save you when it comes time to wash your clothes because you will have less to wash. When you do these, try to do a lot at one time because you will be using laundry detergent and you will want to spread it thin.
- If you spill something on your clothes that might stain wash immediately (if possible), don’t wait until the stain sets in or your will never be able to wear that item again. By using a damp paper towel or a wet cloth you can remove the worst of the stain and then wash the item when you get home. Even if you have to wash it by hand it is better than losing the item. If you can't wash it right away, try putting a little bit of laundry detergent on the stain and put it in the hamper for when you can wash. PS: Drying an item with a stain will usually set the stain for life. If you have forgotten to wash an item right away, wash it but don’t dry it in the dryer. Instead hang it up to dry and continue to do this until the stain is gone.
Had Enough Of ‘Saving Money’?
Me too, but the more you save the more you will have for the things you want. The more you do, the easier it becomes. Using your paycheck wisely is the best way to make sure you have a place to live, food to eat, a way to get to work and money to go out and have fun.
I know that I haven’t even covered half of the ways you can save money. There are so many ways out there that the list is endless. For more ideas, talk to friends, family, co-workers, even local business people. And, by saving energy (to save money), you are also saving the environment.
I know it's hard and I know it's dull to sit at home and not go out all the time, but when you really need (or want) to go out, that money will be there. Chose your priorities and then act accordingly. PS: Have a good time when you do go out.
© 2012 Cheryl Simonds