How to Keep More of Your Paycheck

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A lot of times the way you spend money is nothing more than a habit—and it all adds up. From spending $8 on your morning coffee to $15 on your daily lunch to spending $100 on new shoes, your costly habits can be draining your finances faster than you think. If your paycheck seems to disappear too quickly, it might be time to adjust your spending habits so you can move ahead financially. Here are some good money habits to incorporate into your lifestyle so you can keep more of your paycheck.

Monitor your accounts

Life gets busy and it’s easy to forget, or not make time, to keep in touch with your finances. Have you ever looked at your checking account or savings account statements and been surprised by how little money is left? It doesn't take much time to monitor your financial accounts and it will help ensure you’re always staying on top of your finances.

Once a week, take a minute to review transactions on your checking account and credit card statement and ask yourself if each purchase was worth it. This habit can have a big influence on the way you spend your money.

Once a month, check your other financial accounts like retirement accounts, savings accounts, money market accounts, etc. Determine if you’re saving enough in these accounts and think about ways you can cut your spending in order to save more. For example, if you’re spending $15 each day eating out for lunch, making your own lunch at home could save you money. The money you’re not spending on meals could then be put away in savings.

Make your savings automatic

Many people just spend what they want from each paycheck and save whatever is left over, if anything. If you arrange to have a certain percentage of your income automatically transferred to your savings account each paycheck, you’ll learn how to get by on less money. Plus, you won’t be as tempted to spend it if it goes directly to your savings. This saving habit is also a smart way to create an emergency fund, college fund or a vacation fund.

Create spending rules for yourself

It’s normal to feel guilty when you break the rules, even rules you’ve set for yourself. Create some financial rules and don’t allow yourself to break them. For example, tell yourself you’re not allowed to spend any money on entertainment, like going to the movies or playing a round of golf, until you’ve paid the full balance on your credit card bill each month. Or you could limit yourself to only going shopping at the mall once you’ve reached your saving goal each month for your child’s college fund. Sticking to your own rules will help create better financial habits.

Tell someone about your financial goals

Whether your goal is to own a home by the age of 30 or to pay off your student loans by the time you’re 40, you’ve probably never told anyone about your financial goals. If you fail, you don’t want to be judged, right? However, it’s actually a good idea to share your financial goals with friends or family. It can be a great way to stay motivated and follow through. Fear of failure in front of others can push you to work harder and not give up.

You can also set and keep track of your financial goals with our free online personal financial management tool, My Financial Partner.

You deserve financial stability

When you see a brand-new pair of shoes in the store or you want to take a fun ocean-side vacation, it’s easy to tell yourself you deserve it because you work hard. While it may be true that you work hard for your money, you also deserve more than something that will make you temporarily happy.

One of the best things you can do for yourself is create financial stability. Knowing you’ll have enough money when you want to retire or being able to send your child to college are also things you deserve for yourself. The next time you want to eat out or buy a new gadget, remind yourself that your new goal is financial security. Sometimes, you’ll find security is more fulfilling than instant gratification.

Shop from a list

According to a survey by the National Endowment for Financial Education, three out of four shoppers make impulse purchases when they’re at a store and regret it later. That’s why it’s so important to create a list and stick to it before you go shopping. It can significantly help you control your spending too, never buy anything that’s not on your list.

Don't get discouraged by mistakes

Research shows good habits take months to establish. That means when you’re trying to create a new habit, you should expect to make a few mistakes along the way. For example, if you slip up and make an impulse purchase, it’s ok as long as you recognize it as a mistake and try to avoid it next time. Go easy on yourself and don’t get discouraged.

Understanding the importance of good spending habits can have a big impact on how much you keep from your paychecks. The more you practice these good habits, the sooner it will become second nature and the sooner you’ll be on your way to financial stability.