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Abstract

financial goals as quickly and as painlessly as possible.</p><h2 id="469d">3. Necessities</h2><p id="c83e">Necessities are the bare bones of what you need to survive. These costs are what keep you off of the streets and keep you alive. This is not your daily Starbucks or your Netflix account.</p><ul><li>Food</li><li>Shelter</li><li>Transportation</li><li>Healthcare</li><li>Utilities</li><li>Etc.</li></ul><p id="8241">You have to understand the difference between needs and wants at this step. It is essential that you recognize what keeps you alive in order to better understand the areas where you can cut back. Understand your necessities, and pay for them as quickly as possible when you get your check.</p><h2 id="3855">4. Emergency Fund</h2><p id="c0b8">Everyone should have an emergency fund. Remember that fact I threw out earlier? That 40% of American’s can't afford an unexpected $400 emergency expense? This is where your emergency fund comes in.</p><p id="f843">Having an emergency fund is going to be one of the first steps to relieve some of the financial stress that you would have otherwise. It’s wise to have somewhere between$ 1,000 and $10,000 saved for emergencies.</p><p id="82e4">You can easily take steps towards reaching this financial goal by taking anywhere as little as$ 10 out of each paycheck to place in a separate account that is strictly for your emergency fund. You want this account to be as accessible as possible.</p><p id="10a8">This fund could cover anything from unexpected medical bills to needing some work done on your car.</p><p id="c6f3">The best step you can take to create an emergency fund is to build it up little by little over time. This emergency fund will be even more important than paying down your debts.</p><h2 id="494b">5. Debt Payoff</h2><p id="7a38">There are two different strategies for taking actionable steps to pay off your debt.</p><p id="5984"><b>The Snowball Method</b></p><p id="05b1">This method is particularly good for people who struggle to stay motivated to pay off debt, and have difficulty with making debt payments. With this method you tackle the debt you have with the lowest balance first. This is regardless of the interest rate. Then you move to the next debt with the lowest balance and keep going until you have paid them all off. This strategy can help keep you motivated and give you a sense of financial accomplishment.</p><blockquote id="3450"><p>Whatever you do, don’t avoid your debt. It is essential to take the debt head on.</p></blockquote><p id="4664"><b>The Avalanche Method</b></p><

Options

p id="693a">This method of paying off your debt logically makes more sense, and usually, it will actually save you more money. However, this will depend on your situation whether this method of debt payoff is right for you. This method gets you to tackle the debt with the highest interest rate. You pay off the debt with the highest interest rate first, but you are still irradiating each debt one at a time. You still need to make sure that you are paying the minimum payments for all your other debts though.</p><h2 id="d9cd">6. 4–8 Months Payroll</h2><p id="2b88">This step is your ultimate safety net. This is a preparation method for extreme circumstances, such as losing your job. It’s important to have enough money to live off of for several months set aside because there is no guarantee of what the future holds.</p><p id="f01d">This can be easily achieved in an online savings account. You want to put it in an account that keeps up with inflation but is also very steady. You don’t want any risk associated with these savings. You want these savings to be accessible without being too close to your fingertips because you want to keep it stored away.</p><p id="185b">This payroll safety net as I like to call it is what will allow you peace of mind if anything were to happen.</p><h2 id="f798">7. Investing</h2><p id="b94d">This step is how you get your money to work for you. Investing is what could potentially make you rich. These investments could be real estate, stocks, bonds, etc.</p><p id="0da7">However, there are a lot of steps that come before this, and this can be a backburner item until you take care of your other financial situations. However, you can start investing with any amount of money, and I wouldn’t recommend holding off on investing for too long. You want to get the most bang for your buck.</p><p id="d881">Educating and organizing your finances is one of the greatest acts of self-care you can do for yourself. It is important to recognize the importance of these steps for your future.</p><p id="73ec">It is never too late to start setting financial goals and taking actionable steps to reach them. Even if you feel like you’re drowning in debt and you’ll never see the light of day again, the most important thing you can do is to get a good understanding of your financial situation and take the appropriate steps from there.</p><p id="164b">Gaining control of your finances and making the right financial decisions is essential to a steady future that won’t leave you with any unfortunate surprises down the road.</p></article></body>

7 Places Your Money Needs To Go When You Get Paid

How To Start Saving

When most people get their paycheck they have absolutely no idea what they should be doing with the money. School never taught us about financial literacy, and it’s highly likely that your parents didn’t either. In fact, your parents may be in a difficult financial situation too.

About 40% of American’s can’t afford to pay a $400 emergency expense.

This number is not exactly shocking, but it is disturbing. It’s depressing to think that an unexpected $400 cost could ruin someone's finances.

So let's discuss the steps you need to take in order to make sure that you’re prepared for those unexpected costs, and for your future.

1. Retirement Fund

In most cases, your employer will have an option for a retirement plan (such as a 401K plan) that will put away part of your check before it ever hits your bank account. This means you won’t see any of this money, but it is an essential part of building up your savings. This gives you a safety net for when you have retired from the workforce.

“The only thing worse than dying is running out of money before you die.” — Unknown

It is essential to start saving for retirement as early as possible. You may be in your 20’s right now, but the sooner you start putting aside for retirement and saving the better off you will be, and the more wealth you will have amassed.

You can put away 5–15% of your money before you even see your paycheck, and this will give you a head start on the retirement game. Too frequently people do not have enough money saved up for their retirement.

2. Checking Account

Your checking account is the hub that all of the (important) next steps will take place out of. This is usually where people call it good and don’t take their savings a step further. Your checking account can either be where good intentions go to die, or it can be the go-between you and a better future.

Automatic withdrawals into other accounts are a great option to achieve financial goals as quickly and as painlessly as possible.

3. Necessities

Necessities are the bare bones of what you need to survive. These costs are what keep you off of the streets and keep you alive. This is not your daily Starbucks or your Netflix account.

Food
Shelter
Transportation
Healthcare
Utilities
Etc.

You have to understand the difference between needs and wants at this step. It is essential that you recognize what keeps you alive in order to better understand the areas where you can cut back. Understand your necessities, and pay for them as quickly as possible when you get your check.

4. Emergency Fund

Everyone should have an emergency fund. Remember that fact I threw out earlier? That 40% of American’s can't afford an unexpected $400 emergency expense? This is where your emergency fund comes in.

Having an emergency fund is going to be one of the first steps to relieve some of the financial stress that you would have otherwise. It’s wise to have somewhere between $1,000 and $10,000 saved for emergencies.

You can easily take steps towards reaching this financial goal by taking anywhere as little as $10 out of each paycheck to place in a separate account that is strictly for your emergency fund. You want this account to be as accessible as possible.

This fund could cover anything from unexpected medical bills to needing some work done on your car.

The best step you can take to create an emergency fund is to build it up little by little over time. This emergency fund will be even more important than paying down your debts.

5. Debt Payoff

There are two different strategies for taking actionable steps to pay off your debt.

The Snowball Method

This method is particularly good for people who struggle to stay motivated to pay off debt, and have difficulty with making debt payments. With this method you tackle the debt you have with the lowest balance first. This is regardless of the interest rate. Then you move to the next debt with the lowest balance and keep going until you have paid them all off. This strategy can help keep you motivated and give you a sense of financial accomplishment.

Whatever you do, don’t avoid your debt. It is essential to take the debt head on.

The Avalanche Method

This method of paying off your debt logically makes more sense, and usually, it will actually save you more money. However, this will depend on your situation whether this method of debt payoff is right for you. This method gets you to tackle the debt with the highest interest rate. You pay off the debt with the highest interest rate first, but you are still irradiating each debt one at a time. You still need to make sure that you are paying the minimum payments for all your other debts though.

6. 4–8 Months Payroll

This step is your ultimate safety net. This is a preparation method for extreme circumstances, such as losing your job. It’s important to have enough money to live off of for several months set aside because there is no guarantee of what the future holds.

This can be easily achieved in an online savings account. You want to put it in an account that keeps up with inflation but is also very steady. You don’t want any risk associated with these savings. You want these savings to be accessible without being too close to your fingertips because you want to keep it stored away.

This payroll safety net as I like to call it is what will allow you peace of mind if anything were to happen.

7. Investing

This step is how you get your money to work for you. Investing is what could potentially make you rich. These investments could be real estate, stocks, bonds, etc.

However, there are a lot of steps that come before this, and this can be a backburner item until you take care of your other financial situations. However, you can start investing with any amount of money, and I wouldn’t recommend holding off on investing for too long. You want to get the most bang for your buck.

Educating and organizing your finances is one of the greatest acts of self-care you can do for yourself. It is important to recognize the importance of these steps for your future.

It is never too late to start setting financial goals and taking actionable steps to reach them. Even if you feel like you’re drowning in debt and you’ll never see the light of day again, the most important thing you can do is to get a good understanding of your financial situation and take the appropriate steps from there.

Gaining control of your finances and making the right financial decisions is essential to a steady future that won’t leave you with any unfortunate surprises down the road.