How long does it take you to spend a paycheck? If most of your income is gone before it ever gets a chance to stop "pending," it's time to make some changes. Take a look at these five steps to make the move from frivolous to frugal. Your future you will thank you!
1. Determine income deposited into account
You know your salary—but don't forget about taxes and automatic deductions for things like a 401(k) or IRA. How much money actually lands in your account? That number should be as top-of-mind as the passcode to your phone.
2. Review your spending using a 3-category budget
Think fixed costs, financial goals (saving) and flexible spending. Then check out where most of your cash is going. If luxuries like back-to-back concert tickets are getting in the way of rent or groceries, it's time to make a change. Once you understand your spending habits, you'll have more control over them.
3. Write down three spending behaviors to change
And we mean it—just three. Maybe you'll hold yourself to only one splurge a month, or limit your credit card spending if you know you can't pay that money off right now. The more focused and concrete your goals, the easier the follow-through.
4. Set up a financial filing system
You can go fancy with a mobile app, or old school with pen and paper. Either way, your finances should be as organized as your social media profiles. Sort your information by category, like "work," "car" and "education," and set reminders for when it's time to pay your bills. Track your account balances with mobile alerts.
5. Pay yourself first
If money is automatically headed to your savings account, you won't have a chance to miss it. Set up an automatic transfer from your checking account to your savings account, and then schedule it to occur on a routine basis, like the day after you get paid, for example.
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