pay yourself first http://www.wisebread.com/taxonomy/term/15054/all en-US 7 Money Moves to Make When You Get a New Job http://www.wisebread.com/7-money-moves-to-make-when-you-get-a-new-job <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-money-moves-to-make-when-you-get-a-new-job" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/6759453761_d034daa225_z.jpg" alt="woman in office" title="woman in office" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Whether you are trying to change positions, find work again after a layoff, or simply start your career, it's easy to jump for joy when you get a job offer and forget all about your wealth for awhile. Yet, this is a great time to think about your finances, because taking the right steps now can really accelerate your asset accumulation. Here are seven items you should think about if you want to take your wealth to a whole new level. (See also: <a href="http://www.wisebread.com/starting-a-new-job-3-rules-to-live-by">Starting a New Job: 3&nbsp;Rules to Live By</a>)</p> <h3>1. Negotiate Your Salary</h3> <p>This can be easier said than done, I know, but consider that any amount you can get is going to compound into every future raise, and anything you get now will affect your lifetime earnings significantly. At least negotiate until the employer says something along the lines of &quot;we can't give you what you want, and we won't budge on our previous offer.&quot; Any other response likely means that there is some more room to push, and I've yet to see anyone retract their original offer if you respectfully asked for a bit more.</p> <h3>2. Get the Details on Company Benefits</h3> <p>Did you know that some companies will help you pay your mortgage? That's rare, but most companies have adopted&nbsp;government-encouraged plans like 401(k) matches, cafeteria plans, Flexible Spending Plans, and dental and medical coverage, which can save you thousands a year. Yet, most people seldom ask about these benefits when they are comparing potential job prospects. The inclusion of these plans can make a gigantic difference between the effective pay of a job offer, so take these benefits seriously.</p> <h3>3. Remember Your Former 401(k)</h3> <p>If you are moving from another job, remember to roll your 401k into an IRA or at the very least, move your former 401(k) into the 401(k) of your current employer. Don't be tempted to take it out, or else you end up forgoing all the benefits of a tax-deferred account.</p> <h3>4. Avoid Lifestyle Inflation</h3> <p>If you happen to get a raise by accepting a new job, you definitely won't be alone if you increase your spending. But most people haven't saved enough for retirement either, so don't try to keep up with the Jones in that department. By delaying lifestyle inflation even just one year, you can save much more.</p> <h3>5. Pay Yourself First</h3> <p><a href="http://www.wisebread.com/pay-yourself-first-what-it-means-and-how-to-do-it">Schedule transfers to savings</a> to occur when your paycheck hits your account. This way you won't be able to access the extra cash, and you likely won't miss it.</p> <h3>6. Shift Your Paycheck Into a Savings Account</h3> <p>When HR asks you which account you'd like your paycheck deposited into, provide the information for your online savings account and start collecting interest on day one. This used to work better when interest rates were much higher, but it's still better than nothing.</p> <h3>7. Make Sure You Are Withholding Enough</h3> <p>I used to say that you should never <a href="http://www.wisebread.com/5-reasons-why-its-ok-to-get-a-tax-refund">give Uncle Sam an interest-free loan</a> by prepaying too much of your taxes, but I have come around. For one thing, you are losing just a tiny bit of interest. But more importantly, most people will take a psychological hit when they discover they have to pay additional income tax when filing their taxes, not to mention that a surprise like this could throw financial plans into disarray. That's why you should look at your W4 and make sure you are withholding enough to cover your taxes, as opposed to filling it out to get the least amount of taxes withheld.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/david-ning">David Ning</a> of <a href="http://www.wisebread.com/7-money-moves-to-make-when-you-get-a-new-job">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/left-a-job-do-a-rollover">Left a job? Do a rollover.</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/optimize-your-ira-and-401k">Optimize Your IRA and 401(k)</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/retirement-accounts-and-money-to-spend">Retirement accounts and money to spend</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/pay-yourself-first-what-it-means-and-how-to-do-it">Pay Yourself First: What It Means, and How to Do It</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/got-a-new-job-heres-your-financial-to-do-list">Got a New Job? Here&#039;s Your Financial To-Do List</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance 401(k) lifestyle inflation new job pay yourself first Tue, 10 Apr 2012 10:00:11 +0000 David Ning 917174 at http://www.wisebread.com Pay Yourself First: What It Means, and How to Do It http://www.wisebread.com/pay-yourself-first-what-it-means-and-how-to-do-it <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/pay-yourself-first-what-it-means-and-how-to-do-it" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/6793826885_d3b6befb99_z.jpg" alt="piggy bank on dollars" title="piggy bank on dollars" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>If you have ever read a retirement planning brochure or any website about investing, there&rsquo;s a good chance you have read the phrase &ldquo;pay yourself first.&rdquo; Some financial experts refer to this as the Golden Rule of Personal Finance! But what does it mean to pay yourself first, and how exactly do you do it? (See also: <a href="http://www.wisebread.com/a-comprehensive-guide-to-the-debt-snowball-method-0">A Comprehensive Guide to the Debt Snowball Method</a>)</p> <h3>Pay Yourself First:&nbsp;What Does It Mean?</h3> <p>This commonly used phrase refers to the practice of automatically making a savings contribution or investment with your income before it can reach your wallet. You &ldquo;pay yourself first&rdquo; when you contribute a percentage of your income to your retirement plan or savings account each pay period. The transfer to your savings or investment account is done automatically, before you receive the rest of your income for paying your monthly living expenses. When you pay yourself first, you ensure the specified amount of money you want to save really does make it into your savings account or investment, since it happens before you have the opportunity to use the money for something else.</p> <p>If you don&rsquo;t pay yourself first, you will probably find yourself at the end of each pay period or month without any money left over to save or invest. If you plan to save what you have after you pay your rent, groceries, loan payments, credit cards, and entertainment costs, there is a very good chance that there will be no money left after your expenses and discretionary spending. Making the decision to pay yourself first removes the temptation to skip a planned contribution and keeps your savings and investment goals on track.</p> <p>Creating a system for paying yourself first establishes a priority for your savings and helps you develop strong financial habits. People who spend their money in the reverse order &mdash; paying everything else before saving &mdash; generally reach their retirement years without a nest egg.</p> <h3>Setting Up Automatic Savings Plans</h3> <p>The easiest way to make sure you save a percentage of your income each and every pay period is to pay yourself first with an automatic savings or investment plan. Consider your savings or investment another expense that you must pay, and set it up just as you would any other <a href="http://www.wisebread.com/how-to-set-up-automatic-payments">automatic payment</a> made to one of your creditors. Then you can forget about it. The money is invisible to you, and you will learn to adjust the rest of your spending habits to the income you have after your savings or investments are made.</p> <p>If you receive a paycheck from an employer, you can usually designate a certain percentage of each pay period to your employer&rsquo;s 401(k) plan or to a savings account. Some employers will allow you to have more than one direct deposit created, which means you could contribute a specific dollar amount or percentage of each paycheck into your 401(k) plan, and a specific dollar amount or percentage of each paycheck into your savings account.</p> <p>If you are self-employed or receive income sporadically, you can still take advantage of the &ldquo;pay yourself first&rdquo; strategy. Each and every time you receive income, deposit a specific percentage in a designated savings or investment account before you use the money for anything else. This requires more financial discipline than having your employer deposit the money before you get paid, but if you make it a habit, you can still pay yourself first and benefit.</p> <h3>Additional Tips for Paying Yourself First</h3> <p>The biggest challenge of paying yourself first seems to be the mentality of <a href="http://www.wisebread.com/6-common-excuses-for-not-saving-money">not making enough to save</a> and finding it hard to get started. If you feel like you aren&rsquo;t making enough money to save, try starting with a very small amount, such as 1% of your income. From every paycheck or income received, simply save 1% of the amount, each and every time. You will not miss this amount, and over time, you will have saved some money.</p> <p>When you pay off existing debts and find yourself with more discretionary income each month, or when your income increases due to a pay raise or promotion, you should increase your savings percentage.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/debbie-dragon">Debbie Dragon</a> of <a href="http://www.wisebread.com/pay-yourself-first-what-it-means-and-how-to-do-it">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/jobless-americans-paying-fees-for-unemployment-benefits">Jobless Americans Paying Fees for Unemployment Benefits</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-money-moves-to-make-when-you-get-a-new-job">7 Money Moves to Make When You Get a New Job</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/a-step-by-step-guide-to-creating-your-emergency-fund">A Step-by-Step Guide to Creating Your Emergency Fund</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-ways-technology-can-streamline-financial-management">8 Ways Technology Can Streamline Financial Management</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/64-funny-inspiring-and-stupid-money-quotes-from-famous-people">64 Funny, Inspiring and Stupid Money Quotes From Famous People</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance automatic savings direct deposit pay yourself first Wed, 28 Mar 2012 10:24:29 +0000 Debbie Dragon 913197 at http://www.wisebread.com How to Spend Less Without Starting a Budget http://www.wisebread.com/how-to-spend-less-without-starting-a-budget <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-spend-less-without-starting-a-budget" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/bigstock_African_American_Woman_looking_19159844-2.jpg" alt="Woman with piggy bank" title="Woman with piggy bank" class="imagecache imagecache-250w" width="250" height="146" /></a> </div> </div> </div> <p>Some of the most common advice for helping someone spend less is to start a budget, but this approach doesn't always work. (See also: <a href="http://www.wisebread.com/the-first-step-to-budgeting">The First Step to Budgeting</a>)</p> <p>With a budget, it's easy to get used to how much money you spend because you are so accustomed to seeing the total on a monthly basis. Instead of helping you spend less, you are actually training yourself that your current level of spending is necessary. Then there's the problem of actually doing the work. Many people who have budgets often forget to add up a receipt here and a receipt there, which makes the whole budget unreliable.</p> <p>And in reality, having a budget doesn't automatically help you spend less anyway. Some people feel that as long as they see what they are spending money on, they will stop. This is just a pipe dream. It sounds obvious, but unless you take the effort to spend less on a particular habit &mdash; something you can do without a budget &mdash; your spending won't go down.</p> <p>Try these tips to lower your spending without starting a budget.</p> <h3>Start From Scratch</h3> <p>This isn't easy for some people, as you can imagine, but eliminating almost all of your expenses and starting from scratch will help. What I mean is to treat every bill, every meal out, and all your automatic payments as expenses that you truly cannot afford. Once you scrutinize every detail of what you pay, you will find that part of your spending is on things you don't really care about, and you can start reducing.</p> <h3>Pay Yourself First, and Pretend You Have Less</h3> <p>The fastest way to spend less is to have less. When you have less to spend money with, you will find a way to survive. We obviously don't want to voluntarily decrease our income, so the closest thing we can do is pay ourselves first and then pretend we have less. That's why we should schedule our deposits to our <a href="http://www.wisebread.com/retirement-accounts-and-money-to-spend">retirement accounts</a> the day we get our paychecks and to increase our savings amount every time we get a raise. If we don't get a chance to use it, we probably won't.</p> <h3>Pay Off Debt</h3> <p>Another way to lower your spending is to think of ways to work on your debt payments. From refinancing to moving debt around to lower your interest rate, there are many ways to reduce your debt in order to lower your monthly obligations. Don't forget about this side of the equation, because spending some time here can reap huge rewards.</p> <p>Having a budget is good only if you have the discipline to keep up. As with everything else in life, there are more than one way to skin a cat.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/david-ning">David Ning</a> of <a href="http://www.wisebread.com/how-to-spend-less-without-starting-a-budget">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-much-should-you-spend-on-a-new-car">How Much Should You Spend on a New Car?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-live-on-12-000-a-year">How to live on $12,000 a year</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/if-budgeting-isnt-fun-youre-doing-it-wrong">If Budgeting Isn&#039;t Fun, You&#039;re Doing It Wrong</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-dark-side-motivations-to-get-you-out-of-debt">10 Dark-Side Motivations to Get You Out of Debt</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/when-its-time-to-destroy-debt-start-with-a-goal">When It&#039;s Time to Destroy Debt, Start With a Goal</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Budgeting Debt Management discretionary spending pay yourself first spending less Tue, 15 Nov 2011 11:24:48 +0000 David Ning 782412 at http://www.wisebread.com