Steps I take every payday

Finance Dee offers ways to make the most of payday, including assessing spending habits, covering essentials, and planning for the future.

There isn’t much in life that competes with the feeling of waking up on payday, checking your account, and seeing it replenished.

But that feeling doesn’t really last long when the bills start coming out. And you remember that person you owe money to. Oh, and that random emergency you weren’t accounting for.

But what if there was a way to keep that glorious feeling a little longer? Or at the very least, to avoid the dread of the bank balance going down without a clue where it all went?

Below are a few of the steps I take every single payday to avoid the feeling of dread when looking at my bank balance. Even more importantly, these steps are all part of helping me get closer to my long-term money goals!

We all have to start somewhere

In order to move forward effectively, I strongly believe you do need to look back first to assess the situation.

How did things go with your finances the last month? And if you’re just starting this, look back at the last couple of months. Did you go into your overdraft? Was there a particular area where you spent way too much money? Was there a charge for a subscription you forgot to cancel?

Question your spending habits, and make it a judgement-free task. This is simply to assess what’s working and what’s not.

I find this is good practice to keep me well aware of my spending habits and to give me the freedom to change things in my budget as and when needed. Life isn’t static, it’s always moving. And your finances should also reflect that.

Cover the ESSENTIALS first

Ok, so before we budget in the good stuff, we need to make sure all the essentials are covered. Housing bills, transportation costs, food shopping, childcare fees if applicable, and let’s not forget those debt repayments if you have any. Anything that’s needed to keep your life going is what you need to include in here.

I am a big fan of the 50-30-20 budget which recommends to keep your essentials to 50% of your total budget.

With life becoming increasingly more expensive this is more difficult to achieve, but it still remains a good signpost to figure out if you’re in good shape with your finances.

Secure your FUTURE

Now that you’ve paid all the essentials, pay yourself next! The key here is about building a consistent habit of putting something away every single month for the future.

Honestly, even £10 will do to start. But the more you can stretch that sum up as time goes on, the better.

It’s this habit that keeps me feeling satiated from payday to payday, because I know I’ve kept back something to enjoy at a later stage in life.

For me, this looks like putting 15% of my salary into my pension, making sure my emergency fund has 3 months of expenses, and investing in my S&S ISA. Furthermore, the more money I have stacked away, the more at peace I feel knowing that an emergency or an unexpected situation won’t send me spiralling into debt. That feeling is GOLD!

Fun, fun, fun

We all work hard, and so we must play hard. If you don’t allow yourself to spend on things that bring you joy or make your life a bit more convenient, you’ll quickly experience budgeting burnout and wonder what’s the point.

The 50-30-20 budget I mentioned earlier recommends 30% of your budget goes towards wants. This needs to be guilt-free money that you can do whatever you please with. It’s the things that make life worth living!

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