If you are concerned about your finances, then you already know that taking action is the next step. Unfortunately, the topic of money is overwhelming and involves deep emotions. Here are some tips to help you save your hard-earned money and manage it differently.
Understand Your Paycheck
You get a paycheck at regular, predetermined intervals. But do you understand everything about it? Probably not. And that is okay. Most people overlook the tax portion. Yet it is important to understand your paycheck. Start by taking the time to learn how to calculate salary after taxes. This is useful information whether you are self-employed, a freelancer, working a side job, or looking for a new position and trying to determine if the take-home pay is sufficient.
In addition, when you have a better understanding of your salary after taxes, you might consider adjusting your tax withholdings on your W-4 form, if that applies to your particular work situation. Many people find that they are withholding at the wrong amount, and are essentially giving the government their money to use until they get it back as a tax refund. While that is a nice “bonus” each year, it is actually your money. If you are able to adjust your withholdings in your favor, you will get a slightly bigger paycheck each pay period, but a smaller tax refund each year. This gives you more power over your money.
Set Boundaries with Family and Friends
You are a kind person who genuinely wants to help others. Unfortunately, there is a very fine line between helping and enabling, and helping and being taken advantage of. The common factors are money, someone else asking for it, and you. If you have been in the position where someone in your life has come to you with a request for money, or if you are in an ongoing situation where it keeps occurring, it is time to assess the situation and begin to set boundaries.
Setting boundaries with the people you love is difficult in most situations, but when money is involved, it becomes harder. You want to help. They say they need help. Start by looking at the patterns. Do they keep coming back for more? Are they making excuses? Could they fund their own lives? Could they make better decisions? Do they ever pay you back on time and in full? As for you, are you independently wealthy? Can you afford to keep giving? Is your generosity affecting your own financial safety? You probably know what the next steps should be.
Sit down with yourself. Take an honest look at your finances. Add up all the money you have handed out. Now, it is time to create some statements you can have ready when you are asked for money once again. Be confident. No is a complete sentence. Some people will try to make you feel guilty. You do not have to rationalize your answer. Stay firm. It gets easier over time.
You can use these tips to help you save more of the money that is already yours. Sometimes, the process is not easy, but the results will benefit you right now and in the long run.