How do you know if you should save it or spend it! I’ve always been a big believer in automatically setting aside some money every paycheck for savings. This eliminates having to think about saving every paycheck; it automatically comes out of your account so you don’t have to worry about it. But what happens if you get an unexpected bonus, a commission check or a gift.
This is where having an overall plan for your money will help. It’s so easy to want to spend any additional money you get. Commercials, billboards, the radio, magazine and newspaper articles can be so convincing especially at this time of year. There will always be people telling you where you should spend your money. But ultimately YOU are in control over your money. Don’t give in to the temptation.
- If you are in the process of building your emergency fund, (this should be 6-12 months of expenses) then consider putting that extra money to build or complete your fund.
- If you have personal debt such as credit cards, loans, or line of credits. Put some extra money on those. If you’re not sure how to attack your personal debt
- Start by listing all of your debt from smallest balance to largest balance
- Make minimum payments on all of your debt
- On your smallest balance, after you’ve made your minimum payment, find any additional money you can and put it on that smallest balance
- Once you’ve paid your smallest balance off, take that minimum payment and the additional payment that you were making and put it on the second smallest balance and so forth, until you’ve paid off all your personal debt
- Consider making an additional payment on your mortgage (check out your bank’s pre-payment options)
- Always go shopping with a list. Whether you’re grocery shopping or shopping for clothes, create a list. When you have a list you shop with a purpose. Without a list you may be prone to impulse buying.