Money Management

Pay Day

By  Alan Brenner

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What do you do with your take-home pay? Whether you get paid in cash, check, payroll check, or direct deposit you have bills to pay. The typical order of where our cash goes is to food, shelter, and everything else. It’s the everything else where the decision making takes place. We have to make good decisions or some of the bills are not going to get paid. Living payday to payday is a stressful existence. Always having that voice in your head saying “what happens if I get sick, or lose my job, or get my hours cut…” is a miserable daily grind.

How do we get off that wheel?

Let’s put aside for now that we want a better job or a higher paying job. Let’s focus on what we have direct control over right now! Here are just some of the areas to explore.

  • Rent or Mortgage Payment: If you are still living with your parents and they don’t charge you, go to #2! If you are renting, is the rent about 20%-25% of your monthly take-home pay? If the rent is higher, then you are paying too much. Example: If your monthly take-home is $3,000, your rent should be around $750.
  • Car Payment: Are you driving a vehicle that is draining your wallet? An old beater that requires a lot of repairs is costing you potentially more than the cost of a low mileage lease on a Honda Civic or Toyota Corolla. Making the right decision on weighing the pros and cons of choosing reliable transportation within our financial ability is something a Financial Coach can assist with.
  • Food and Beverage: We all should be eating healthy and not overspending. Sometimes those two options don’t go together. Typically, we do not realize that the $3-$5 daily latte or cappuccino is cutting into our monthly budget. 3 days a week at $5 a day adds up to $60 per month. Reallocating $50-$60 on healthier food can make us feel better and help us keep some weight off. Or, how about that nightly cocktail at your favorite hangout for happy hour? Add that up and ask yourself can those dollars be reallocated to a better choice?
  • Car Insurance: 15 minutes will save you a lot of money. Not endorsing a specific brand, but when is the last time you reevaluated your car insurance coverages and cost? Over time these dollars add up to a ton of money.
  • Subscriptions: In the digital age, we are paying for internet, cable TV, Netflix, Hulu, Apple Music, Sirius XM, Amazon Prime membership,etc. Add all this up and ask yourself if having all these services is worth it, or can these dollars be reallocated?

The Ultimate Goal

These are just some of the questions we can explore and make some different decisions to get to the ultimate goal. The ultimate goal is having enough cash left over after paying all the bills, including paying our credit cards off in full every month, to save at least 6 months of living expenses in an emergency fund. After we establish the emergency fund, we can think about making some other investments.


This is a permanent way of life. You need to commit to it. Keeping your eye on the prize in the long run, gives you the opportunity to do what you want, when you want to do it. It’s financial freedom. You do not have to be a millionaire to become financially unburdened on a monthly basis.

Let’s talk about the methods on how to achieve the ultimate goal. First, you might consider downloading the Budget Worksheet and fill it out. It’s an easy way to determine where you can make improvements in your financial life. Work with us further and we’ll immediately give you credit for the cost of the Budget Worksheet.

Disclaimer: The information in this article is not intended to encourage any lifestyle changes without careful consideration and consultation with a qualified professional. This article is for reference purposes only, is generic in nature, is not intended as individual advice and is not financial or legal advice.

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