Exactly What I Do On Pay Day To Manage My Money

The most sound advice I was ever given to handle money was, "Always, pay yourself first, Gabby." I took that advice and as a result, saved over half my income in one year. Financial literacy is so so important, especially for young adults who are just starting their careers. What you today, will impact how you are living, feeling, and making 10 years from now. Set yourself up in your 20's and see the compounding results for the rest of your life.

The following is what I do every single time I receive my paycheck:

  1. Review My Pay- Stub Tax rates, contributions to retirement accounts, or benefits expenses are the items that I check on my pay stub to make sure the percentages are right. Automation is the key to saving and paying yourself first. So, I have both a 401K and Roth 401K. I put 10% in each for a total of 20% of my paycheck into these two accounts. Also, I check to understand any variances and know if you need to make changes to benefits, withholdings, or retirement contributions.

  2. Check Automatic Transfers Automation is key to paying yourself first. The less time and energy you have to put into these actions, the longer you are going to stick with them. The money that comes through, 20% is transferred to my personal IRA and Roth IRA. With the Roth IRA, I can only contribute up to $6,000 a year, so I also make it a priority to max it out first and then put the rest in my regular IRA. Another 10% is transferred, to my savings accounts. I have two savings accounts one is an emergency account that I focused on until I reached $5,000 and, now everything else goes into a high yield savings account.

  3. Select A different charity to donate 10%. Give and, you shall receive. The advice my dad gave me when I was young and the one I wholeheartedly believed in. There a couple of charities I rotate between and support.

  4. Check my credit card statements I love travel credit cards. I rarely ever use cash because I, rather pay by one of the travel reward cards to get the points. Therefore, every other week I check my balances and pay them off. I do not wait until the end of the month to pay it off.

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© 2023 by Gabby Chamdal