If it seems like your paycheck is not stretching as far as it ought to, you are not alone. There are some ways you can change the way you use your money which can help you put more of your paycheck into savings. These tricks can help you build for a successful financial future.
Consider Real Estate Investing
There are plenty of benefits to homeownership, and one of those is the tax benefits. Owning a home is also a great investment strategy, whether you live in that home yourself or rent it out. If you want to know more about the benefits of owning a home, you can look online for more information on how homeowners and investors can benefit. This can be a great guide to reduce taxable income when it comes time to file taxes.
Start Your Own Business
Businesses can be successful side hustles, or you can develop them to be full-time gigs, and you can often deduct business expense from your income, which can reduce your tax bill. If you are fully self-employed, you may be able to deduct your health insurance premiums from your insurance, if you meet the requirements, and you may be able to deduct the cost of home office equipment, inventory, or office space rent. Just make sure you speak with an accountant to ensure you are getting the right deductions for your business.
Use Your Perks at Work
If you are paying for client meals or travel for work, you may be able to reduce these expenses. Read over your organization’s policies on work expenses like these and see if your employer will consider reimbursing you for them. You could also get a credit card tied to the business.
Besides reimbursing you for business expenses, your company may offer perks that you aren’t fully taking advantage of. Any perks offered by your employer are part of your pay from them, so it’s a good idea to make sure you are fully utilizing them. Some employers offer a gym on site while others provide snacks or even meals.
Max Out Your Retirement Accounts
Putting more into your retirement accounts may mean your take home pay is less, but in the long run, it’s one of the best ways of saving. Check how much you can add to your IRA and 401(k) accounts for the year and make it a goal of putting in the highest amount allowed by the IRS. If you’re unable to contribute the max this year, try incrementally increasing contributions over the next few years.
It’s easy to be spending too much on baking fees, but these are not difficult to avoid. If you use ATM machines, make sure they are not out of network, which could be costing you. Consider getting cash back when purchasing in store so you don’t need to use the ATM machine. Many banks also have minimum balance requirements, so make sure you meet those to avoid additional fees. It’s important to protect yourself from financial fraud and to make sure you are not leaving money on the table if it is available. Consider switching your direct deposit to a checking account with high yields, which allow you to get the most for your money. Keep the rest of your paycheck in a savings account because those tend to have even higher yields.
Put Any Raises into Savings
If you receive a promotion and raise at work, it’s important to maintain your current expenses and lifestyle instead of allowing the money to be spent. It’s easy to let spending increase with raises, whether that is taking a fancy vacation, upgrading homes, or buying a new vehicle. However, this prevents you from being able to improve your finances since you won’t be saving any more than you did before. It is easier to keep living the way you are right now than to downsize your lifestyle after it increases. Of course, the dollar amount of your living expenses may increase from year to year because of inflation, but you should use a budget to ensure you do not make any drastic changes.
Keep an Eye on Your Pay
It’s important to review your paychecks regularly, even if you get paid the same amount with each one. Reviewing each paycheck ensures you are not having any deductions taken out, and it helps you keep track of what benefits you are paying for. If you didn’t read the fine print closely enough, companies might withhold a little from each paycheck. If you owe a debt that is causing your wages to be garnished, it’s important to keep track of when you will be done paying it off. Usually, companies will not stop garnishing wages unless they receive a notice from the collector, and you may find it is up to you to ensure they receive this notice.