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Are you living check to check and trying to identify ways to make your money work harder for you? Take a moment to review the items below and let’s start making your money last longer and go further.
1. Identify all of your Revenue/income: add together to come up with an annual amount. If you paid bi-weekly you would take your Net Pay (the amount that you take home after taxes and insurance) and multiply by 26, or if you paid weekly take that amount and multiply by 52.
2. Identifying Expenses: Write down everything you spend money on daily and month. Be sure to write down every item regardless of how trivial it may seem: gifts, Cups of coffee, packs of gum. Add them all together for one month and multiply by 12.
After you have completed this then subtract your total expenses from your income and see what you have left over. Are your expenses higher then what you make? Are you just breaking even (revenue = expenses) Are your expense lower than what you bring home?
Advice: your Home expenses should not exceed 50% of your total take home pay. If married then 50% of your total combined take home pay. If they’re more, work on cost saving measures or consider looking for something more in your price range. Total expenses include your mortgage/rent as well as the utilities and monthly upkeep (landscaping, housekeeping, etc.)
If your expenses are higher then what you bring home, you are in debt!
Sit down and think about what you’re spending your money on and reduce items that you may want but do not need. If you can’t eliminate them completely, consider not doing as frequently. Continue reducing until your expenses are equal to or less than your total income.
If your expenses are equal to what you make, then you’re walking the tightrope.
If you are just barely making it, then you would want to work on cost saving measures that will bring your spending down even more. Consider reducing some expenses by shopping the sales ads and finding those necessities at a lower cost or even consider taking a few extra minutes to cut coupons out of the Sunday Pay. Invest a few dollars in a paper that has on average $150 plus in coupons and savings is a smart investment that will allow you to add a few dollars at a time to your savings.
If your expenses are less than what you are bringing home, Congratulations!!!
Clearly you are doing something right. However, there is always room to grow and expand your earnings.
Look at how much you are investing into your retirement savings and consider increasing it. Are you remembering to pay yourself first? Paying yourself is when you take a set amount of your income and put it into savings and you do not spend it. By continuing to do this, you will find that your savings will continue to go. Take the time to review the interest rates offered by your bank and shop other banks and see what they are offering.
By: Leah Keating
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