Not everyone has money left over after they’ve cashed their paycheck, bought groceries and paid bills. But some weeks you might find you have a few dollars spare.
Putting aside a set amount every week can help you feel more financially secure and better prepared for emergencies. By saving money regularly, you might also be able to afford things like new clothing or new cellphone.
What percentage of my paycheck goes to taxes?
This all depends on how much you earn and in which state you live. Of course, you can’t keep every dollar you earn – a good chunk of it goes on taxes. You’ll pay more or less tax than someone else based on the amount you earn, your marital status, and the allowances you claim.
How will a second job affect my taxes?
The percentage of your paycheck that goes on taxes will also be higher if you have a second job, as your overall income will be higher.
Remember, your taxes will likely be taken automatically from your paycheck if you’re working for an employer. If you’re an independent contractor you’ll have to pay self-employment tax and file your own tax return.
Either way, use a tax calculator to work out how much tax you need to pay.
What if I can’t save anything from my paycheck?
You might find that after paying your taxes and living costs, you aren’t in a position to save any money.
That’s fine. A good trick in this situation is to prioritize the bills you need to pay and the ones that can wait. Then consider where you could make cuts on your spending next month. A good starting point for this is our guide to budgeting on a low income.
How much should I save with every paycheck?
If you can save money regularly, you definitely should – even if it’s just a few cents in a jar. Whether it’s 1% or 10% of your income, any money you can set aside makes a difference, whether as an emergency fund or to save for a vacation. Even just $30 a month could add up over time.
To create a savings goal, simply work out how much you need and when you need it by - then work backwards. For example, if you need $500 for a summer vacation, set a date for the trip then see how many month’s you’ve got. Simply divide the target by the number of months for your monthly saving goal.
Remember that once you’ve put money aside for something specific, try not to touch it until you’ve reached your saving target.
If the amount you earn varies, try saving different amounts from week to week. One way of managing your finances is by splitting them into three categories:
- Living costs. This is where the bulk of your income should be spent – including rent, utilities and groceries.
- Savings. Set aside leftover money as savings. It will come in handy if you come up short in other parts of the year.
- Flexible spending. Realistically, you’ll spend money on things that aren’t essentials – such as gifts, kids’ toys and items relating to your hobbies and interests. This shouldn’t take up much of your income.
How to save money every paycheck
Here are a few simple budgeting tips on how to save when you’ve got your paycheck:
- Do your shopping within the period your paycheck covers. If you get paid every week, shop for that week only.
- Pay bills and send money right away. This means you’ll have a better idea of how much you have left.
- Cash your paycheck. Having cash in hand gives you a better idea of how much you actually have to spend.
- Use coupons and your Shopper’s Card. Look for coupons to download or bring paper coupons and your card with you to Money Services to get savings on check cashing and grocery shopping.
- Do it all in one trip. Don’t spend money on gas or buses by making a number of trips to cash checks, pay bills, grocery shop or send money – you can do it all at once at Money Services. Find your nearest location with our store locator tool.