canada goose 7 tips to get the most out of every paycheck Paul Sisolak, GOBankingRates Oct. 19, 2015, 1:01 PM Wring out every cent. Shutterstock It’s a great feeling, having a paycheck burning a hole in your pocket. But that sensation can quickly turn to anxiety when you’re unsure what to do with the money or you aren’t wise with your financial decisions. A solid income stream and decent financial IQ might not be enough without a good financial plan in motion; you could still be living paycheck to paycheck, a problem that 38 million Americans struggle with every day, according to research from the Brookings Institution. Whether you just started your first job or you’re a veteran in the field, there’s no better time than now to start being productive with your paycheck. Learn: 10 Ways You’re Blowing Your Paycheck 1/ Get your money organized. See-ming Lee/Flickr 1. Create a budget. If your paycheck is used to randomly pay for various expenses, bills and purchases, but you’re not keeping track of what’s spent where, you definitely need to create a budget. This first step can be as easy as writing down your monthly expenses in descending order of cost and determining how much of your net pay should go to each. You can use a flowchart, budgeting calculator or one of several money budgeting sites, tools and apps — like, which can automatically break down what you’re spending your money on and how you can modify your financial habits. One way to start setting up your paycheck for better use is the strategy of paying yourself first. Prioritize your savings, then bills and discretionary expenses, in that order. The best thing about making a budget is that it can be adjusted according to how your needs and income change over time. 2/ Adjusting your withholding can add a little more to your paycheck. Flickr / Raúl Hernández González 2. Adjust your income tax withholding. A nice, big tax refund is always one of the financial highlights of the year, but it would serve you better dispersed throughout the year as part of your paycheck. A large tax return means too much income is being taken from your check each pay period, hence why it’s given back after tax-filing season. By increasing your withholding adjustment on your W-4, you’ll have less money taken out and more money available to allocate month to month toward saving, investing and other necessities. 3/ The “snowball method” is one way to pay down debt. Flickr / John Lodder 3. Pay down debt. Paying off any existing debt you might have before allotting money to your savings is one of the best ways to pay down your debt. Are you making only minimum payments on your loans or credit cards, or have you missed some here and there? Either way, the penalty interest can prevent your paycheck from going as far as you might like. There are a few schools of thought on paying debt, but the Debt Snowball Method , popularized by Dave Ramsey, recommends starting with the smallest balance and working your way up. Another perspective is to pay off the most expensive debt — the one with the highest interest rate — first. Ultimately, everyone’s financial situation is different, so you’ll have to determine which approach works best for you and what you can afford. 4/ Make sure your money goes where you want. Flickr / Edwin Torres 4. Set up direct deposits. If you’re prone to splurging and spending as soon as your paycheck is cashed, you can arrange with your employer to have part or all of your pay directly deposited into a savings account. If you direct deposit part of it rheingoenheim-info , you automatically have savings set aside and you’re less likely to spend it. If you direct deposit all of it, you not only have money already in your savings account, but you can be more careful and deliberate about how much you transfer to your checking account to spend. Opt for an account that bears a higher interest rate so the money you deposit accrues valuable dividends. Later on, consider withdrawing some of that money to re-invest into a certificate of deposit or mutual fund. 5/ Be prepared for something to go wrong. Adam Berry / Getty Images 5. Set up an emergency fund. You can call it an emergency savings fund, a rainy day fund or a “worst case scenario fund.” An alarming number of people aren’t financially prepared for life’s surprises; 34 percent, in fact, have no emergency savings in place at all. Determine how much you can afford to save. Ideally, you should aim to have a financial buffer of at least several months — a year, if possible. There are also some recommended approaches to prioritizing what you tuck away in the bank. The 50-30-20 rule dedicates 20 percent of your income to savings and debt — but how that 20 percent is divided up depends on what you can afford and how you’re prioritizing saving money and paying off debt. Michael Gauthier of Truth in Financial Planning writes about the “70/30 rule.” This rule states that once your bills, revolving expenses, and other essentials are paid off, put 70 percent of the remaining money into your emergency fund and the other 30 percent toward your lifestyle. 6/ Prepare in advance for the day you stop working. Bruce Bennett / Getty Images 6. Save for retirement. Retiring without savings can leave you broke or struggling financially when you’re no longer in the workforce, so it’s important not to overlook a retirement fund. Look into getting a savings account designed for retirement like a Roth IRA or 401k through your employer. Save what’s feasible within your income, though, as saving too little — or even too much — can affect other financial priorities. Keep Reading: What Retirement Without Savings Looks Like “Too many people put 100 percent of their savings toward retirement accounts. Don’t do this,” writes Gauthier. “The last thing you want to do is become IRA-rich yet cash-poor.” Gauthier’s advice includes making sure you have access to savings for more immediate needs like remodeling projects or your child’s wedding. If your money is tied up in a retirement account and you’re tempted to withdraw it earlier than the account terms allow, you could incur financial penalties and taxes. According to Gauthier, one workable method is to apply the 70/30 rule to your retirement plan by depositing 70 percent of what you save in retirement accounts and 30 percent in taxed, non-retirement accounts. The latter can be dipped into if needed, but if you have an emergency fund, you can use that instead. 7/ Everyone deserves the occasional treat. Flickr / AwayWeGo210 7. Treat yourself. All saving and no spending makes earning a paycheck very dull indeed. Once you’ve taken care of everything on this list, like paying off debt and saving where appropriate, it’s OK to use the remainder for some discretionary spending or a special purchase. Using cash or a debit card instead of a credit card is recommended because it prevents the risk of overspending and going into debt. Don’t be afraid to reward yourself — every once in a while — for being responsible with your money. Treat your paycheck plan like a diet: Stick with it, stay disciplined, and you’ll see and feel the results. Read the original article on GOBankingRates. Copyright 2015. Follow GOBankingRates on Twitter. 8/ MORE FROM GOBANKINGRATES: • 5 Destructive Money Behaviors to Stop Today• 40 Money Habits That Can Leave You Broke• 5 Money Traps to Avoid in Your 30s and 40s• 7 Fears That Keep You Poor• 10 Ways You’re Hurting Your Kids Financially Previous 1/ Next Read the original article on GOBankingRates. Copyright 2018. Follow GOBankingRates on Twitter. SEE ALSO: 12 things no one should ever do with their money canada goose parka

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