You may be wondering how the rich get richer and the poor get poorer. You also may be one of the many people who live paycheck to paycheck. I used to have the same thought and definitely know what it’s like to wait on that next pay day. That is why I want to share with you the 3 decisions to make with your next paycheck.
“Managing money wisely has little to do with the amount you have, but the amount can definitely show how wisely you have managed your money. “
TD
To that end, I want to be clear that the 3 decisions shared below are for anyone with a paycheck. Success in any area is typically found by following a few key principles. I want to share a few of those principles to help you develop good money management habits. Here are the 3 decisions to make with your next paycheck.
#1: Give 10% to Charity
The first thing you should do with your next paycheck is give to charity. There are countless individuals who contribute at least 10% of their income to charity or, in many cases, their local church. The feeling of giving will never lose its power, and I encourage everyone to implement this into their financial plan. Let me give you a few thoughts from some pretty credible people.
“No one has ever become poor by giving.”
Anne Frank
“I have found that among its other benefits, giving liberates the soul of the giver.”
Maya Angelou
“It is more blessed to give than to receive.”
Jesus Christ
Giving is a financial principle that has benefits well beyond the gift itself. If you have held onto every penny without thinking about giving, that’s okay. It is not human nature to give first, but I challenge you to give 10% to charity on your next paycheck and watch what happens.
#2: Put 10% in Savings
You would think that this is the easy one, right? Unfortunately, many people do not save at all. Those who do, save very little according to this survey. It can be quite frightening to lose your income without having any savings or emergency funds in place. When you get your next paycheck, it would benefit you greatly to put away at least 10% for a rainy day. I recall a time when I received a phone call that my company was downsizing. I was given two weeks to find a new job. My wife, who stayed home primarily, was about 8 months pregnant and we already had a two year old. Thankfully, we had practiced putting at least 10% of our income in savings. We were able to keep living and paying every bill for the next few months without assistance until I transitioned to another job. I know from personal experience, you should definitely save at least 10% of your next paycheck.
#3: Use 10% for Active Investing
We all know the importance of investing money in a company 401k. At least, many are aware of this in America today if it is available at their company. We may also understand a bit about investing in an IRA, to give ourselves an even greater return on investment. What we are not typically aware of is the importance of active investing.
Essentially, you want to use 10% of your next paycheck to actively invest in something in order to gain a profit. You could save this money and then invest in a business of some sort. I know individuals who started a network marketing business, for example. Some individuals buy and sell items for profit like cars or antiques. You can also invest in yourself, which will always return a profit. Regardless of how you choose to actively invest your money, you should absolutely be in the business of doing so. Active investing gets you involved in the process of investing your money and could spark the next million dollar idea for you. Your involvement alone can get your mind thinking about ways to make a profit and meet your financial goals faster. I’ll leave you with this thought in hopes that you will do this on your next paycheck.
“Profits are better than wages. Wages will make you a living, profits can make you a fortune.”
Jim Rohn
If you want to receive more updates like this, don’t forget to subscribe and share with someone you know. For more support on your journey to success follow me on Twitter, LinkedIn, Instagram, Facebook, and YouTube. You can also consider signing up for one of my coaching sessions here. Let’s start your journey to becoming more.
