How to make the most of your pay check
Learn how to save money when you might be unsure where to start!
This is Katie’s Newsletter, Saving money is exciting to me and how you can do it too. .
So let’s set the scene….I arrived in New Zealand in 2016 with the mindset to travel and experience everything (more on that another time) I spent my first year working in a bar and living life to the fullest with one of my best friends. I dropped her at Auckland airport to head back home, in 2017 and when I arrived back in Wellington I had $300 to my name, rent was due, I had to eat and making $16 an hr.
I told myself I have to start planning for a future, whatever that looked like; being able to stay in New Zealand and making it my home, more travelling but also have an emergency fund to fall back on in case I had to go home and start again. I decided that when my next pay check came in I would sit down and budget everything out.
So this is how I have lived for the last 5 years with the same mindset on how I treat all my money that comes in and for anyone else not knowing where to start this might just help you too.
I break down my pay heck using 3 headings working out what my needs are, savings/emergency fund and then whatever is left is to spend/fun money.
Create a spread sheet of everything that comes out of your account in order of highway to lowest.
Needs:
Needs are things we have to pay, this includes rent, phone bills, internet, power, car payments, gas/petrol, groceries and any subscriptions eg Netflix, Disney+ etc
In New Zealand rent is a weekly occurrence and in my opinion and most of New Zealand agrees it’s exceptionally expensive, we split between 2 and we either get paid bi-weekly or weekly.
Power and internet is paid monthly and normally we work out what half would be between us and pay that into the house account when we get paid, subscriptions are also Monthly you can choose to pay these into the house account all at once if you get paid monthly or if you get paid weekly split between 4 weeks and half if no-weekly.
If you have credit card payments, Afterpay etc make sure you include these, Afterpay pay off as soon as the payment is due and pay minimum payments on your credit card if possible pay more than the minimum if you can. The quicker you can pay these off the more you’ll have more disposable income you’ll have to either spend or save.
Groceries are getting expensive do some research we have actually found that Hello Fresh is a better option than buying groceries it’s healthy and it saves is having to think about what to cook for dinner and gives us lunch the next day. We buy staples if and when we need them. If you want to grocery shop think of meals that you can bulk make, have extra in the freezer or to take for lunch the next day, make these healthy.
Saving/Emergency Fund
Ok so I have two accounts that I pay into. I consider this as paying myself- I put the same account into each account that can be anything from $20-$100. Check with your bank they might have a special saving account. For example I have a Super Saver Account with ANZ bank. The deal is you have to put at least $20 a month into it or automatically set up $5 a week (out of sight out of mind) the catch is you can only take money out of it once a year for free, if you do take money out more you get charged a fee. I found this extremely helpful as I hate getting charged late fees. I also put in any extra I have at the end of the month as this money also occurs interest (not as much as it used too, but anything is better than nothing)
The account that I call savings is for anything that I want to do that comes up through out the year, festivals, a weekend away, but never let it go below $1000 you want the safety net incase of emergency eg the car breaking down, power bill more expensive, etc
Everyday Account:
Once you have paid all your bills that you have, and paid yourself any money that is left is yours to spend, for the week, bi-weekly or month. My mindset is just because it’s there doesn’t mean I have to spend it, but treats are good especially for self care, go for dinner with friends, get your nails done, get that coffee you’ve been craving do the things that you enjoy and make you feel good.
If there is money left in this account when my next pay day comes around I split what is left between the other two accounts, half in savings and half in emergency fund and then start the whole process again.
I find this is the best fit for me, you might find another way that works but this keeps all of my funds under control and in order and I do get excited when every pay check comes in.
Join me next time for ways that I have been able to save and what I do and don’t do.
If you try this saving method let me know how it’s working for you. It can be a slow process but give it time, with inflation increasing everything remember to not be hard on yourself if your not saving as much as you want. That will come! Be patient and good luck.