Friday, September 26, 2014

Financial Thought of the Day September 26, 2014: Matching Expenses with Your Paycheck

One of the ways I developed to save money is to add up your bills for the year and divide it by the number of paychecks you get in a year. If you get paid every other week divide your total expenses by 26. If you get paid twice a month you divide total expenses by 24. If you get paid once a month you divide total expenses by 12.

It gets a little more complicated if you work for yourself but developing financial statements will help even in this situation. If your expenses exceed your paycheck, you may want to either work more or cut back on expenses because you are burning through your savings or going in debt. If your expenses are less than your paycheck you are saving money.

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