Making and following a budget is essential to financial security and success. Therefore, it is important to know how to manage your finances and, in turn, you will receive the most benefits afforded to you. Anyone can make a simple financial plan, but the simple version may not always have your best short and long term interests in mind.
The days of having to wait on a paycheck have come and gone. Technology has given us direct deposit and quite a number of companies like PayWeb offer online pay stub options so that you may review your check immediately. Due to immediately accessible funds, a strong budgeting plan should be in place. The worse thing would be for the necessities to be left unpaid. Therefore, once you receive your paycheck and have reviewed all of your deductions to ensure that they are correct, allocate money to each portion of your budget. Use the following guidelines to make sure that the right things are paid first.
1. Give to Yourself - While this may seem contrary to paying bills, it is very important to set aside a portion of your paycheck each pay period to your savings and retirement accounts. If you do not make this your number one priority, you will never have the right amount of savings to have a secure future or have an emergency fund. Securing at least ten percent of your bring-home income for a savings and retirement fund is a good start.
2. Pay Your Housing Expenses - Your mortgage or rent should be next on your priority list. You need to have a place to live, so you must make sure that this expense is covered.
3. Pay Your Utility Bills - Of course, you cannot live in the dark, without heat or water so make sure that you cover your utility costs right after you have budgeted for your housing expenses.
4. Pay Car and Insurance Payments - If you own a car, make sure that payments are made on your loan and for your car insurance.
5. Student Loans - If you are still burdened with student loans, make sure that you pay this before other bills. Student loan debt quickly accumulates interest and if you go into default, the lenders can take aggressive action against you.
6. Food and Living Expenses - Make sure you allocate enough for your food, drinks and other minor expenses such as gas for the car.
7. Credit Card Payments - This should be the last line on your budget and, hopefully, your smallest debt. Credit card debt can quickly escalate, and should be used with caution.
8. Entertainment - Yes, you need to budget some money for entertainment. You cannot work all the time without having some form of relaxation. It may not be a large part of your allowance, but setting aside some money for dinner and a movie helps make paying all the other bills seem a little easier.
9. Leftovers - If you still have some funds left over after you have taken care of these obligations – good for you. Now you can set this money aside for things that you want. You may need to save for a little while for larger items, but the money will be there for you when you are ready.
It takes a little practice to create the right budget for yourself, and it takes a little time to get into the routine of following one. You have to be intentional when it pertains to your financial success. Take the time and become familiar with your pay statement so that you will know up front what to expect. The benefits are enormous and the financial security is well worth the effort.
Budget-wise Nickey Williams loves getting paid accurately and on time, and follows a strict financial plan. PayWeb is a payroll company that offers on time electronic pay stubs which are great for remote employees. These pay stubs are password protected, so they are more secure than paper stubs, and are eco-friendly to boot.
Photo credit: http://www.flickr.com/photos/76657755@N04/8125994718/
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