It’s a wonderful feeling you get on payday: you worked hard all week (or for two weeks in many cases) and you finally get rewarded for it with a big fat check. What do you do with it? Do you spend it, or save it? Plenty of people are tempted to go shopping, have a few drinks, or pamper themselves in other ways. But you really should be saving at least have of each check, depending on what you make and what other expenses you have monthly. Follow a few rules of thumb to make sure you use and save each check appropriately.
If you support yourself
Let’s use a real-life example. Someone I know supports himself by making $15 an hour and working an average of 65-70 hours per week. After taxes, that’s about $700-$800 weekly. But he has a lot of expenses that that money needs to cover. He lives on his own, $1000 monthly rent. He has a car loan, $340 a month. He has car insurance, $270 a month. Cable and internet, $90 a month. Electric, $50 a month. Not to mention gas, groceries, dining out, saving to buy a home in the future and other miscellaneous expenses that he’d like to indulge in. So if you are like my friend in this example, you can appreciate every cent you make and you learn how to save up. Even though he has plenty of bills to pay, he finds a way to keep money in the bank and build his savings for future needs.
If you live at home but have your own bills
Okay, so maybe you don’t make $15 or $20 an hour and still live at home – you probably wouldn’t want to. Maybe you make around $10 an hour and work 20 hours a week or so but your parents don’t let you freeload and rake in the dough. Plenty of college students (and some graduates) can relate to having to pay for their car insurance, cell phone bill and maybe even groceries and car loan (if they have one) while living with their parents. It’s not uncommon and very standard these days. So if you maybe good money but still have to pay a few bills while shacking up at home, you can reevaluate your expenses. You may be able to afford a few extra shopping trips or nights out with your friends, but don’t get crazy. You will not want to live at home forever so try saving money in a savings account. Trust me – you will thank yourself later!
If you have no expenses and live with someone/parents
You lucky duck you! Count your blessings because these situations don’t last long. If you are in college or graduating soon, you’re not going to live the posh life past graduation usually. Be very cautious with the money you do have and save as much of it as you possibly can. You should be able to since you don’t have any bills, but you may also be tempted to go shopping or spend mindlessly. Don’t! Money certainly doesn’t grow on trees and even though the economy has shown little improvement, there’s no guarantee that things will be comfortable once you’re in the real world.
There’s one thing my mom always told me when it comes to saving for something I need versus spending on something I don’t: “What do you want more? That, or gas in your car?” I always keep that in the back of my mind, plus the fact that you never know what you will need your money for down the road. Happy saving and responsible spending!