It’s Payday! Time to pay a few bills online and enjoy a Tini with your crew. Before you head out to the beach, there’s the all-important pit stop at Nordstrom’s for that peep-toe Espadrille. “I earned it; I deserve ‘em,” you assure yourself.
As you swipe your debit card, you think, “Did the car note come out?” After all, it’s the first of the month and seemingly everything—from rent to the car note to the cell bill—is due. “Please Lawd let this transaction go through. I promise I will get this budget together,” you mumble. Yikes! Your card was declined.
It’s easy to spend indiscriminately. Yes, you have to track your dollars and budgeting software like mint.com can help. But if you really want to stop making random purchases, give the categories in your budget a purpose.
Each payday, divide your money into four categories: save, spend, give, and live. Here’s how to do it.
Save at least 15% of your income in a savings account not tied to a checking account. Credit unions and online banks are the perfect place to store cash via direct deposit. To find a bank with competitive rates, log on to bankrate.com.
Spend 50% on bills and eliminating debt. This can be difficult if your rent and car note total more than the recommended amount. Time for some roommates and a smaller car (or better yet, bike it)! Try consolidating student loans, taking public transportation to work, moving home, selling valuables on Ebay, and eliminating cable. Don’t worry ladies! You can still get your Power fix via netflix.com or hulu.com, starting at $8 per month.
Give at least 10% to your favorite charity or local cause. Why? Because even if you’re struggling, there are people out there who are less fortunate. Plus, it’s a write-off. Check out charitynavigator.org to view ratings and financial data for charities
Live with the idea that you can travel in style or pursue your passions by squirreling away 20% of your check. We all want to live free and setting up an account separate from savings will help you do that.
If you align your money with your values, it will go where you want it to go. So, what to do with the remaining 5%? Whatever you want!
—Tanisha A. Sykes is a writer and editor in New York City. Follow her on Twitter @tanishastips.
