It's Payday!
1. Check Your Pay Slip
This one seems obvious but the amount of people I’ve worked with who don’t check their payslip or know how much to expect on pay day is incredible. Its the whole reason most people go to work and they don’t even check they’re being paid the right amount! It may be boring but knowing you’re on the right tax code, roughly how much overtime you’ve done, and any other deductions is crucial in knowing if you got paid correctly. Mistakes can happen but are usually easy to rectify so double check there’s nothing out of the ordinary.
2. Stick to Your Budget
This one is simple enough but needs emphasising. If you don’t stick to your budget any financial goals you have will be delayed every time you overspend. If you don’t have a budget, make one, they give clarity to your spending and make saving your money a lot more straightforward. You can find advice on this subject here.
Recommended Reading: Learn how to create the perfect budget for you Budgeting For Beginners.
3. Pay Yourself First
This one is thrown around a lot in the savings world but what does it mean? Basically as soon as your pay check hits you move the money you designated for saving and investments to their appropriate accounts. This ensures that your savings are safely tucked away for that month and wont be accidently spent on a night out. Its a simple but effective method to saving every month. For investing, I ensure that I buy my chosen investments every payday no matter the stock price so that I am continually drip feeding into my portfolio.
4. The Essentials
Just like with step 3, I move all the money I need for the month for my essential spending into a separate savings account until the bills are due. This ringfences the money so I know exactly what is going out of my account before next pay day. I like to use a bank account that allows multiple savings accounts to be created and renamed such as Chase. This means I can have my monthly money for groceries and fuel set aside in one account and my monthly bills in another whilst also gaining interest until it is used up. This may not be for a everyone but it quickly allows me to ensure I’m keeping up with all my bills and sticking to my monthly budget.
Automation vs Manual Payments
This is a personal preference but I prefer manual payments over direct debits. This way I don’t get surprised by any payments as I am forced to keep track of them. I also enjoy the aspect of moving my money into the correct savings account and buying my investments manually as well. I’m the type of person who would be checking my account that the money has come out anyway so at that point I might as well have done the transaction myself. If you struggle setting aside money for savings its never been easier to automate these so you automatically get money added towards your goals. Feel free to test out direct debits, standing orders and other saving options such as round ups to see what works for you.
5. Have Fun!
Now you know you’ve been paid correctly, you’ve stuck to your budget and your money has been either invested, saved or ringfenced for bills, you’re left with the remainder. This might not look like a lot compared to the original payment but its yours to do whatever you like with it. Money is meant to be enjoyed after all so go have fun knowing full well all your payments and savings have been sorted for the month.
Conclusion
A monthly payday ritual is great for the average saver as it reinforces the budget you have in place and helps you keep progressing towards your financial goals. Mine is a more manual approach as I like to do it myself but would be very easy to automate. Do you already have a pay day ritual, if so how does yours differ? Let me know down below and have a great week!
Disclaimer
All information is not financial advice and is purely meant for educational purposes only. Investing involves the risk of loss of capital as well as its gain. Any investments mentioned on this website are meant as examples not specific recommendations. Always do your own research and/or gain the help of a financial advisor.
