You work hard for your paycheck — isn’t it time your paycheck works hard for you? Follow these steps to get started.
Understand Your Paycheck
With direct deposit, it is easy to not pay a lot of attention to your paycheck. Take a minute to look at your paystub and check in on where your money is going. Your paystub breaks down your earnings, deductions and net pay that you take home. If you get paid hourly or have flexible hours, take a close look at what you are paid over several paychecks to really understand the pattern of your average net pay.
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Once you have a good idea of what you take home, take some time to create a budget. What are you spending every month on things like groceries, dining out, shopping, utilities, rent, entertainment, transportation and more? Set targets to keep your spending on track and be sure to save for long and short-term goals and pay down your debt. You can also use your direct deposit to automatically save every month by having a set amount of money go directly into a savings account.
Make Smart Tax Decisions
You should make sure you are withholding the correct tax amount. If you are withholding too much, you may get a nice refund come tax time, but you are losing out on money you could have on hand all year long for purchases, paying down debt, savings and emergencies. If you don’t withhold enough money, you could owe the government a large amount every April.
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Plan for the Future
No matter your age, it is crucial to start saving and planning for retirement. Contribute to your 401k program — the money goes straight to your retirement savings pre-tax. Also, check into other programs your company offers like 401k matching or a pension plan. When you are thinking about switching jobs, be sure you know when these types of programs vest and what are the financial consequences if you leave.
Maximize Your Benefits
Be sure that you are taking advantage of all of your benefits, otherwise you are leaving money on the table. Ensure that you have the right health and or dental plan that fits your needs. Health Care Flexible Spending Accounts allow you to save money pre-tax to use on medical expenses. Remember, if you saved too much money at the end of the year in one of these programs, you can always make purchases, like new glasses. If you work for a large company, you might have additional benefits like emergency drop off childcare, gym memberships, discounts at local restaurants and businesses or even on products ranging from electronics to cars.
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Position Yourself to Earn More Money
While this is certainly easier said than done, there are things you can do at your job to try to earn more. Have an open dialogue with your supervisor about your career goals, always play up your achievements without bragging, try to negotiate a raise and work hard to achieve a promotion or maximize your annual bonus.
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