How should I spend my paycheck?

I would pay the one off completely and cut it up. One less bill, more money saved on the next check to pay something else off. Do you own a car now? They are expensive, insurance, maintainance, own it out right if you can. The less bills you have the better off you are. (Freedom) is what your looking for. Free to keep your money to yourself.

You are lucky that you are not living from paycheck to paycheck. My husband and I are barely making it with the very little bills we have. My husband is now working part-time and I have had no luck finding work at all. The closest I come to working is making a few bucks online. It has been a struggle, but I am trying very hard. I just have the basic bills such as Internet, DirectTV, car insurance, mortgage, food, power and city bill. The only extra bill I have is a credit card that I use in emergencies (right now I am working towards paying it off).

Ok let's break this discussion down two ways... the first is MY way to get yourself out of debt the fastest (and least painful) way possible. The second will be what to do once you are out of debt. I am completely debt free. Meaning... all credit cards are paid in full. The only interest I pay on anything at ANY time is my house and ONE car (I own two newer cars). So what to do... What you want to do is to pay as little interest as possible -- ever. Calculate what your living expenses are and set that money aside. If you get paid bi-weekly or twice a month, then take your total living expenses for the month (rent/mortgage, food, water, medical, etc...) and NOT money like movies, take-out, shopping (non-essentials) and set that money aside. Now we have the money that is actually money that we can figure out what to do with. If you have three credit cards then find the two lower interest credit cards (and/or loans) and pay the MINIMUM amount of money for those cards. The third card will be the card with the highest interest and that is where your money goes. It is OK for you to spend some money IF you can pay the minimum amount on all your bills. If that is the case (and you say you are not living paycheck to paycheck), then you can take 30% of your non-essential money and put that towards having a good time (movies, shopping, concert, etc...); the fun stuff. Below is a mockup of how this would work. You are paid $1200 twice a month after taxes, 401K (I need to write a new thread about that!!!), etc. Your take home pay is $1200 Paycheck -- $1200 Living expenses -- $930 Rent -- $1000/mo ($500 this paycheck) Utilities -- $200/mo ($100 this paycheck) Medical -- $60/mo ($30 this paycheck) Misc (food, cable, phone, etc) -- $600 ($300 this paycheck) The $930 is going to be set aside from the $1200 leaving you with $270. Money to spend -- $270 You get to have 30% to have fun with... so take $81 and put it in your pocket! You have $40/week to play with. This leaves $189 You have three credit cards. For the sake of making this short(er) and easier we are going to say the minimum balance on each card is $50/month. Credit Card 1 pay $50 Credit Card 2 pay $50 Credit Card 3 pay $89 (this is the high interest credit card) You have just balanced yourself out. You are doing a lot of things. #1. you are making sure you have money to 'pay the bills'. This is your essential money that is taken out first (I personally put it in a separate bank account). #2. you have some play money. I would recommend this ONLY to people who are not in dire straits debt, but just want to pay down some credit cards and get to a $0 interest lifestyle. #3. you are paying all your credit cards on time #4. you are paying down one credit card (after that is paid off DO NOT cancel it. Use it very occasionally and don't pay interest on it. This will help your credit score.) #5. you are increasing your credit score. By paying all your bills on time and paying down on one (decreasing your DTI {debt to income ratio}) Now..... you have gotten yourself so you are paying off your credit cards every month and you are paying no interest on any credit cards. WHAT NOW? I recommend to people to use the 50-30-20 strategy. This will allow for you to save for your retirement as well as make sure you have money to have fun and to be able to pay your bills. 50% -- This is your must-haves to live (food/water/shelter/clothing) 30% -- This is your cable bill, gym membership, whatever you want to spend it on. 20% -- This is "emergency money". This money is in case you lose your job or something catastrophic happens in your life. This 20% should be saved in a bank account until 3 months of your 70% are achieved. In the case above that is $2,022/month times three months (2022 * 3 = $6066). So you should have an emergency fund of $6066. I personally have double that in an emergency bank account, so consider 3 months a bottom-of-the-barrel for emergency funds. After all credit cards are paid off and all revolving debt except for a house and a car (with low interest on each [under 5% on house, under 3% on car]) then you can start about investing your 20% ($480/month) with a professional broker. Now under $500 does not sound like a lot... how am I going to amass enough money to live off of just putting that little amount away? $500 is: $9.61/week $500 is: 1.37/day (a cup of COFFEE) OK ready to see what you are worth? With a very (VERY) conservative 5% rate of return from a professional broker... your $500/month is: $500/month @ 5% Rate/Return (conservative) 5 years -- $34,144.72 10 years -- $77,964.64 25 years -- $298.995.50 47 years -- $1,136,857.38 (47 years is from 18 years old to 65 years old) $500/month @ 8% Rate/Return (moderate) 5 years -- $36,983.35 10 years -- $92,082.84 25 years -- $478,683.29 47 years -- $3,126,896.61 $500/month @ 12% Rate/Return (aggressive) 5 years -- $41,243.18 10 years -- $116,169.54 25 years -- $948,817.55 47 years -- $13,770,714.00 Now... this all sounds well and good. But let me add I did NOT add for inflation which is about 2.32% right now which makes a BIG difference in these numbers. $1,000,000 won't go nearly as far in 25 years as it does today. That doesn't discount the fact that in 34 years (a home mortgage is 30 years) you are a millionaire spending $1.37/day. No debt. A house paid off. Cars should be paid off... etc.... Now, as your salary grows in your job, that offsets inflation (or should) and you get into some really complicated economical-mathematics. All these numbers above are for someone making UNDER $30,000/year. Incredible. You have a VERY important decision on your hands... what DO you do with your money. I know this was a long post but I hope it helped! Thanks, Zelo

Better deposit that money in your bank account if you have any, for future use. Times are changing, and our economy is getting tougher, so better be prepared for any problems you will face in the future.

Do you own a bank account? For sure, paychecks need to be deposited to your bank account. If you are on your own, you need to prioritize your monthly expenses: your rent, your bills, your grocery. It just depends on whether you live on your own or with your parents. How many credit cards do you have? I advise avoiding the use of credit cards as much as possible. If you do use it, pay up the balance as much as you can so u don't get into the habit of paying monthly finance charges. It's better if u don't have any balance on your credit card at all. Are you working full time? Look for online income opportunities when you have time.

I'd definitely pay the credit card debt off first. You definitely don't want that hanging out for too long. Although, if the debt isn't too bad, put half your paycheck to saving fo the new car and half towards the credit card. Good luck!

If you have credit card debt, pay it off! Every one you pay off is better than a raise. It reduces your monthly expenses, so you have more paycheck to work with each month... without raising your tax bracket. Take the credit card with the highest interest rate first, pay it off in as few months as you can afford. Then, after that one is paid off, then put the amount you paid each month and put it towards the next card bill, plus the minimum amount you have been paying all along. Stay on this schedule until you have paid off all your debts. As I said, pay off debts is better than a raise because you get more money per month to work with, and don't find yourself in a higher tax bracket.

I have a couple of credit cards and I have researched ways to best pay them off. First you have to figure out which card has the higher interest rate on it. It doesn't matter how much you owe on each. Now make sure you pay more on the card with the highest interest rate every month. Any else you have left to spare, put it on the lower interest card. There are actually heaps of sites that offer a calculator that tells you how quickly you can pay off your cards depending on how much you pay each month. Here is one: http://www.infochoice.com.au/calculators/credit-card-calculator/ Good luck with it all- I know that once I pay off my cards I am never buying anything with credit again! Interest is such a waste of money!

I'd put 60 percent away in the bank. There is nothing like peace of mind. The remaining 40 percent I would divide what ever you want. Live on that 40 percent and forget about the 60 like it never existed. This way if something happens you will be covered. Good luck.

I think it'd be good if you pay one of your credit cards completely. I seriously don't like credit cards, they scare me. Anywya I hope you save enough for travel, cars soon. Have a wonderful weekend

Spend your money on things you need first, and I would advice you to save your money up for anything else you want in the future.

I would pay off the one credit card with it, and then on your next paycheck, keep paying off the other cards. I wouldn't worry about saving for vacation stuff or a new car until you get completely out of debt. Just my opinion.

Itis better to clear off your debts first and to deposit the balance amount in the bank or other wise can be invested in shares etc.

Hey!! My suggestion would be to clear out the debts first then go for the car and savings.. as if u clear the debts then the load is gone from ur head and u can enjoy the earnings after that. dis is my suggestion to u. Hope it helps. :)

I have been trying to do the generally excepted way of paying down credit cards. That is to pay the minimum on all except the highest interest rate and use the extra money to pay it off first. I now however find that I have a bad habit of adding to those cards a little each month so while I am paying down that first card the others are increasing, or at least staying the same. I have changed that strategy now to pay on each card the interest, the minimum payment amount and anything I have added during that month. This allows me to pay down each card by the minimum payment instead of paying most to only one card. This seems to work well and will continue to see if it makes a difference long term. Credit cards are way to convenient and can quickly get out of hand. Even if you do not add anything to the balance and only pay minimum it takes many times longer to pay it down than it would by adding just a little more to each minimum.

well it is really good to have a budget and i think your idea about paying off one card is a great idea - especially the one with the highest interest. also, you would be wise to start saving for retirement. if you squirrel some away every paycheque, you will be well off by the time you retire. start as early as possible.

I would pay off one credit card and paying off the others as well when you can again. Saving up for a travel car would be more enjoyable when you pay off all your debts.

Better divide it evenly. To your 3 cards, saving up for travel and your car.

bills first ok.