8 Things You Need to Do with Your Money When You Get Paid

💰Set a reference point by calculating your essential living expenses and ensuring they stay below 60% of your net income.

💡Build a solution fund to provide psychological comfort and peace of mind, knowing you're prepared for emergencies.

💳Pay off high-interest debt instead of keeping it and use your savings to reduce your overall financial burden.

🗓️Maximize employer match retirement contributions and start saving 3 to 6 months' worth of essential living costs in an emergency fund.

📈Invest in your own skills and knowledge to increase your earning potential and prioritize your financial future.

Why is it important to set a reference point for your expenses?

—Setting a reference point allows you to track your spending and ensure your essential living expenses stay within a manageable range. This helps you avoid excessive debt and financial stress.

Why should I build a solution fund?

—A solution fund provides a safety net for emergencies and unexpected expenses. Having this fund gives you peace of mind, knowing you can handle any financial challenges that come your way.

Should I pay off high-interest debt or save more?

—It is generally more beneficial to pay off high-interest debt first. By reducing your overall financial burden, you can save money in the long run and allocate more funds towards building your financial stability.

How much should I save in my emergency fund?

—It is recommended to save 3 to 6 months' worth of your essential living costs. This provides a sufficient buffer for unexpected situations like job loss or medical emergencies.

Why is investing in my skills important?

—Investing in your skills and knowledge can lead to increased earning potential and career growth. By continuously improving yourself, you open doors to better job opportunities and financial success.

00:00Introduction: Learn the eight essential steps to take as soon as you get paid to maximize your financial well-being.

00:35Step 1 - Set a reference point: Calculate your essential living expenses and ensure they stay below 60% of your net income.

02:27Step 2 - Build a solution fund: Save one month's worth of living expenses in a high-interest account for emergencies.

03:49Step 3 - Pay off high-interest debt: Use your savings to pay off debts with interest rates above 7-8% to reduce overall financial burden.

05:59Step 4 - Focus on employer match retirement contributions and save 3-6 months' worth of essential living costs in an emergency fund.

07:55Step 6 - Invest in your skills and knowledge to increase your earning potential and prioritize your financial future.

09:44Step 8 - Decide how to allocate additional income based on personal priorities, such as paying off mortgage or investing in different types of accounts.

10:48Conclusion: Recap the eight steps and offer additional resources for managing your finances.