Financial Planning for Generation X & Y Women
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Expert Q&A Archive

How do you "pay yourself first" when you're just making it?
What tips do you have for when you add up all of your expenses and you find out you're just making it? How do you "pay yourself first"?
Gail V. Marquet:
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This can be a tough one - look at your expenses and see where you can cut out or cut down. Is your rent or car payment out of line with your income? Do you have credit card bills that take up a large part of your income? If any of these occur, decide what you can do to cut these down and give yourself more income to save. If everything is in line with your income, perhaps you need a different job which pays more, or have a part-time job to add income.
Barbara Babcock:
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First of all, congratulations on writing a budget and on "just making it". Sounds like youíre not in a negative cash-flow scenario, but you donít have too much left over after you meet expenses. First of all, look at your expenses and see if thereís anything you can cut back or cut out. Do you eat lunch out every day? If so, youíre probably spending at least $100 a month on lunches. Brown bag your lunch and you could save that cash. If youíve already trimmed the fat from your budget my next suggestion would be to see what kind of money "leaks" from your pocketbook each month. Sometimes itís not the dollars that do us in, but the nickels and dimes. Do this: keep a notebook or piece of paper on you 24/7, and write down every penny that you spend in cash. If you put 50 cents in a vending machine for a pack of gum, write it down. If you spend $1 on a newspaper, write it down. At the end of a week, total up your out of pocket spending. If you habitually spend a few cents here and a dollar there on impulse buys, you might be surprised how that money can add up. Continue tracking and see how much out-of-pocket spending you do in a month. Then, give yourself an allowance (say, half of what youíre currently spending) and save the rest of that money.
Claudia James:
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It sounds like this person needs to get a higher paying job-remember that 50% of the workforce is mismatched and this is often reflected in the paycheck. Perhaps this person needs to get a second job for a period of time to reduce any accumulated bills.
Delores Lenzy - Jones, CPA, CIA:
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One suggestion is to consolidate your expenses and then start paying yourself.