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Payday is one of many people’s favorite days. But did you know that what you do right after payday can have a big impact on how the rest of your month is going to go financially-wise?
A lot of us are on the road to being financially-stable as well as financially savvy. There are many things we can be doing to get there such as saving, budgeting our expenses, cutting corners where we can, and investing.
In today’s post, I am going to be sharing things you should be doing right after you get paid to ensure that you are building your finances up as soon as you get your paycheck.
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What You Should Be Doing Right After Payday
Pay yourself first
I recently read The Richest Man In Babylon which, if you haven’t read yet, pause reading this and go purchase right now. Even though this book was published in 1926, it still holds a lot of information that is relevant today in regards to how the hell to actually handle money and get financial freedom.
The first thing the book teaches is to pay yourself first before you pay back what you owe others.
It might sound strange doing it this way rather than paying off your debts, but it will make sense in a second. Paying yourself first ensures that you are putting the money towards YOUR future, not into somebody else’s pocket.
If you choose to pay your bills or debts off first, you might be left with a sum of money that you think is not enough for you to live off of AND put towards savings. Makes sense?
How much money you will put into your savings differs from person to person, depending on how much you are making. Financial experts advise putting between 5-20% of your income into a separate savings account. If, however, you are currently in a position where even 5% seems like a lot, start with 2% until you get used to that being taken out of your account biweekly or monthly, and then slowly raise that percentage.
Go grocery shopping
The second thing you should do at payday is going grocery shopping.
We all know that preparing food at home is way cheaper than takeout. While it may seem like getting a breakfast sandwich and coffee doesn’t cost much, you could make multiple breakfast sandwiches and coffees at home for that same amount.
In the long run, buying groceries and making your own food is going to add up and save you a lot of money.
Here are some money-saving tips when going grocery shopping:
- Don’t shop on an empty stomach. You will end up buying more than you need.
- Make a meal plan so that you know what you will be cooking.
- Make a list of what you need and only buy what is on your list. Here is an affordable meal planning pad that can help you with your shopping lists!
- Stick to whole foods and avoid processed junk food. Whole foods are way more wallet-friendly than packaged goods.
- Have a few meatless days throughout the week. Meat costs are higher than those of veggies and grains.
- If you have coupons, use them on purchases you know you are going to need.
- Brand names on foods only mean you will be paying more money. Generic store brands are cheaper and just as good.
- Pre-cut fruits and vegetables are convenient, but a complete waste of money.
- Buy in bulk whenever possible.
Take out your fun money
After you’ve paid yourself and gotten groceries, it is now time to budget your fun money.
I’m the type of person who spends WAY more on my card than I do when carrying cash. Something about actually SEEING the money disappearing from my wallet makes me think twice about spending it.
Whether you spend less in cash or on your card, this tip is going to work in both cases.
In my case, I take cash out of my bank account and put it in an envelope. I know that this is the money that I am allowing myself to spend that month on clothes, dinners, drinks, etc.
If you’re someone who spends cash faster than the money on your card, do the same thing except instead of putting your fun money in an envelope, put it in a separate bank account.
The key here, though, is to ONLY use the money you have allocated yourself and to not go back to your main account for more.
Fill up your car
I always fill up my car on payday! It’s the easiest way of doing something for yourself that you’re going to have to do later anyway. Might as well do it right off the bat, right?
Pay your bills and debts
After you are done using your money for your OWN benefits, it will be time to start paying off your debts and paying your bills.
Do this at the end of your payday routine, and make sure you get everything paid that needs to get paid! It’s the worst when you get to the end of your bank balance and realize you still have a bill to pay which you’d forgotten about.
If you’re looking to get organized with your budget, try using a budget planner like this one which will help you stay on budget.
What are some of your tips for what to do with your money on payday? Share them with us in the comments!