Between rent, groceries, bills, and other necessities, it can be hard to budget your paycheck each month. While you might intend to sock away funds for a rainy day, sometimes other financial emergencies get in the way. The encouraging news is there are realistic ways you can divvy up your paycheck so that all priorities are covered. Financial education specialists share the following budgeting tips. 

How to Divide Your Paycheck

1. Follow the 50/30/20 Rule

This formula is a good rule of thumb when figuring on which funds should go where. Start by dividing your paycheck into wants, needs, and savings. Allot half of your earnings to the essentials such as rent, groceries, and monthly bills. Your budget should also be earmarked for some fun. Segment 30% for entertainment such as restaurants and clothing purchases. Finally, commit the last 20% to a savings account, retirement, and paying off credit card bills and other debt.

2. Pay Yourself First

Speaking of savings and retirement, paying yourself first can help grow your nest egg. Financial education specialists recommend channeling at least 10% of your take-home pay to long-term savings. You can arrange with your bank or credit union to have the amount automatically transferred each payday to your savings and retirement accounts. If your employer offers matching contributions on your 401(k) plans, be sure to take advantage of this offer too.

3. Make Adjustments as Necessary

Perhaps your financial circumstances don’t fit within the 50/30/20 parameters. You may live in an area where housing costs eat up a large chunk of your paycheck. Or, your main priority may be to pay off student loans or high credit card balances. Financial education professionals suggest making adjustments that will accommodate your priorities. The overall goal is to be debt-free so you can build savings over time.

 

It may take a few attempts, but once you commit and take tangible steps, you can effectively manage your paycheck. For additional guidance, turn to Paycheck Raise in Wadesboro, NC. The financial education agency specializes in helping people from all walks of life get back on solid footing and achieve their goals. Give the professional and friendly team a call at (910) 434-5855 to schedule an appointment, or visit the website for more information on the firm’s full suite of services.