3 Simple Tricks to Maximize Your Monthly Pay
By P. S. on The Capital
Most people are stuck in the vicious circle of earning monthly and spending it all before the month ends. You begin the month prosperously but end it not so prosperous with a bunch of credit card debt hanging over your head. While this is a very tough situation to be in, it is not a difficult circle to get out of. Making some changes to the way you look at money can help you break the loop and set yourself up for financial freedom in the long run. This article is about the practical baby steps you can take right now to make sure you are maximizing what you are making and use that to overcome your financial burden slowly but steadily.
Pay yourself every month
Paying yourself first is the first step towards getting out of the vicious circle of spending. You can allocate a certain amount of money every month based on your expenses and set it aside as a pat on your back for the good job you are doing in taking care of things.
The stress is on paying yourself FIRST. Make a rough estimate of your monthly expenses and put the extra cash away in a savings account. It is very important that you do this first, right after you get paid, since if you wait to pay yourself at the end of the month, then it is highly likely that you may very well splurge on the extra cash and it may never see the savings account.
Start with a very small amount that you are comfortable with, maybe 5% of your paycheck or maybe 10%. Create a savings account and make an automated payment of the X amount to your savings from your checking account every month. Once this money is out of your checking account and into your savings, forget about it.
Some employers even let you split the money and deposit directly into different accounts. That would be an even better system since you won’t even see the entire amount coming into your checking account and few months later you would have a bigger chunk in your savings, at your disposal, for any investment you wish to make.
Get the higher APY savings account
Creating a savings account is important, but creating it in an FDIC insured high APY paying bank is smart. Most of us do not care about the returns our bank pays but rather just try to save.
While this is a very good first step, you can take it a notch higher by saving the money in a high APY paying savings account. You can just google “highest-paying savings accounts” and there are a bunch of websites that list the banks which can pay you an APY upwards of 1.50%. Make a quick call or browse the bank to understand the details and you are on your way to higher APY.
Based on how much you are saving, this interest paid could be a nice little flight ticket for your next vacation. Extracting every bit of value out of your salary can help you maximize your salary and make it bigger than it already is.
Know your taxes
One of the most overlooked components of saving money is knowing what you owe in taxes. Most times people get one of the free tax filing software and file their taxes without exploring what benefits they could extract from their taxes.
Learning all the rules and nuances involved in filing taxes and getting a good CPA for filing your taxes can save you a bunch of money in the long run. This is especially true when you start investing. There are a lot of rules catered for people who invest and knowing the rules can be very helpful in identifying what you exactly owe. This is why getting a CPA can be very rewarding in the long run and help you discover new investment strategies.
All the above-discussed steps are the easiest low hanging fruits any individual can take advantage of to maximize their regular monthly income. It is always good to remember that making money is an art but saving money is a bigger art. Not everyone who makes a ton of money is rich but anyone who saves money the right way can organically grow to be wealthy and rich with time. The 3 steps above are the starting points for a wannabe investor who intends to maximize wealth. Start with these three simple tricks today and thank yourself later!!
