These are the six things I do every time I get paid!

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00:00 Start Here
00:30 Take Out Taxes
01:58 Contribute To Roth IRA
03:34 Pay Off Credit Card
05:09 Pay Non Credit Card Expenses
06:42 Move Money To Savings
08:15 Notice Financial Trajectory

Once a month, every time I get paid, I sit down and do six things that help me stay organized and avoid any bad financial surprises. In this video, I share those six things.

1. Take Out Taxes

Whether you are self employed or employed with a company, it is important to make sure that you are setting aside enough money from each paycheck for taxes. This amount varies from person to person; however, it’s important to take the time to make sure you’re setting aside the right amount to avoid a large tax bill at the end of the year.

2. Contribute $100 To My Roth IRA

The next thing I do when I get paid is regardless of how much I make on a given month, I contribute $100 to my Roth IRA. And if I make more one month, I consider putting more in my Roth IRA. It is important to be in the habit of contributing a certain amount for retirement each month because eventually you will need money for retirement.

3. Pay Off Credit Card

I put most of my expenses on my credit card and run up the balance each month. I do this because it allows me to have one single bill to pay at the end of the month rather than having to keep track of multiple. Once I get my statement each month, I immediately pay it off and bring the balance down to zero. Credit cards are a great tool to consolidate bills; however, do not consider doing this if you do not have the self control to pay off the balance.

4. Pay Off Non Credit Card Expenses

I am unable to put certain expenses like my health insurance and rent on my credit card or I am met with a high fee. It is important to be aware of these fees and make sure you are not paying them. I set all of these bills on direct deposit and make sure that they were actually charged.

5. Move Money To Savings

Since I am self employed, I have to be very cautious with how I spend and manage my money. Whenever I make more, I do not spend more, but I set aside the extra money for a worse month. I personally like to keep my checking account at around $150 because I do not have many expenses that go through my checking and by moving all the extra money over to my savings, I never confuse saving money for spending money.

6. Notice My Current Financial Trajectory

The final thing I do on my payday routine is to zoom out and see if my account is growing, stagnate, or declining. This allows me to understand the financial path I am on and I can make changes if need be. No trajectory is right or wrong, but it is just dependent on your goals in life.

**I am not a financial advisor. The ideas presented in this video are for entertainment purposes only. You are responsible for the financial decisions that you make. Links above are affiliate links where if you click and order, I will receive a commission at no cost to you. **…(read more)

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Managing money effectively is a critical skill to have in life. It is not just about making more money, but also wisely allocating the money you earn. Without proper money management, it is easy to be left wondering where all the money went at the end of the month. As an individual who has experienced financial struggles and overcame them, I have developed a routine to ensure my financial stability. Here are six important things I do when I get paid that can serve as money management tips for anyone looking to improve their financial situation.

1. Pay off debts: The first thing I prioritize when I get paid is clearing any outstanding debts. Whether it is credit card bills, loans, or any other financial obligations, paying them off immediately helps to avoid accumulating interest and late payment charges. By eliminating debts quickly, you will have more financial freedom and flexibility to allocate your income towards other important areas.

2. Set up an emergency fund: Life is unpredictable, and unexpected expenses can arise at any time. Building an emergency fund is an essential part of money management. I make sure to allocate a portion of my income to this fund each month. This fund acts as a safety net, providing financial stability in case of unforeseen circumstances such as medical emergencies, car repairs, or sudden job loss.

3. Invest in savings and retirement plans: Building wealth and securing a comfortable future are essential aspirations. To achieve these goals, I allocate a portion of my income towards savings and retirement plans. Regularly contributing to these options ensures that my money grows over time, providing financial security and independence in the long run.

4. Budgeting: Creating a budget is crucial for managing finances effectively. It allows me to plan and control my spending, ensuring that I live within my means. Budgeting involves outlining essential expenses such as housing, utilities, groceries, and transportation, as well as allocating funds for discretionary spending. By tracking my expenses and sticking to the budget, I can easily identify areas where I can cut back on unnecessary spending.

5. Save for specific goals: Apart from setting up an emergency fund, I also allocate money towards specific financial goals. Whether it is buying a house, going on a dream vacation, or funding higher education, saving money consistently helps me achieve these goals. By setting a specific target and consistently saving towards it, I am more likely to reach my desired goals within the desired timeframe.

6. Treat myself: Lastly, money management is not just about saving and investing, it’s also about enjoying the fruits of your labor. I make sure to allocate a small portion of my income to reward myself. Whether it is going out for a nice meal, buying a book I have been wanting, or planning a small weekend getaway, treating myself within limits allows me to enjoy my earnings while still maintaining responsible financial habits.

In conclusion, effective money management is essential for a financially stable and stress-free life. By clearing debts, building an emergency fund, saving for the future, budgeting, and allocating money towards specific goals while still indulging in personal treats, I have been able to achieve financial stability and security. These six tips can help anyone wanting to take control of their finances, ensuring that their hard-earned money is wisely managed and utilized for both immediate and future needs.