1 Split Any Unexpected Income
When you have get a nice bonus from work or some extra cash for a gift, use the rule of thirds to determine how to use it: One third for the past – Use one third to pay down debt you owe – One third for the future – Put a third into savings or some form of long term investment. One third for the present – Use this third for something you want, don’t be afraid to treat yourself, buy something nice, some clothes or maybe a new piece of furniture or electronics. If you follow this rule, debt will shrink, savings will grown and you will feel rewarded.
2 Prepare for The Unexpected
Commonly referred to as a slush fund, it is important to have money saved for worst case scenarios, be it a car accident or a root canal or even the roof caving in on your home make sure you have money set aside for these eventualities to they don’t destroy your budget. Most experts recommend having 3 months income saved for your slush fund, and whilst this number is daunting its the average length of time a professional will take to find a new job, so make sure you are covered. Most experts also recommend not to set this up in a high interest earning investment, instead to just have it easily accessible as you never know when you might need it.
3 Stop Using Your ATM Card
Take a page form the history books and don’t carry your ATM card with you, its too easy to swipe your card when you suddenly get a craving for a chocolate while driving past your local servo. Instead take out your weekly walking around money at the start of each week (don’t forget to account for everything such as your morning coffee or a packet of gum), and live off that money instead.
4 Put Yourself On A Pay Roll