Are you the type to control all your expenses? Or are you the type to go all-in on investing, and leave nothing to your saving? Below are several tips for allocating your paycheck to saving and investing.
1. On allocating your paycheck, prioritize what is important
Never go all-in on investing with your paycheck. Remember, you have to pay rent, food, and health insurance to stay alive. Also, set aside some for entertainment. You need it to avoid burnout. If you have debt, then allocate some to pay off the debt too. If you plan to invest more, going a little bit tight with your monthly budget can help too.
2. Set your goal
Once you know how much is left in your account, set your goals. Be specific and divide them into short-term and long-term goals. When do you plan to finalize your goals? How much money do you need to save to achieve the goals by the scheduled time?
If you find it hard to restrain yourself and end up spending money needed for other goals, try to find helpful tools. Some digital banks or online advisors provide you with an automatic deposit option. This trick is especially applicable to those who have a stable monthly income.
3. Make separate saving accounts
If necessary, separate your paycheck into different savings accounts. For instance, divide them into one for an emergency fund, one for traveling, or other long-term goals that you wish to realize. By separating them, you can check the exact amount of money you have saved. This way you can also avoid spending the money on other things.
4. After you are done allocating your paycheck, start investing!
Your savings are now all secured. It is now your time to start investing! Remember, only invest legally. Make sure you really know what you are doing with your investment money. You don’t want your money to burn away from scams!
