Do Your Expenses Grow Into Your Paycheck No Matter How Many Raises You Get?

Most people tend to grow their expenses to fit their paycheck. And what I mean by that is, it doesn’t matter if you make $60,000/year, $120,000/year, or $200,000/year. When you’re in a position where you’re receiving a steady paycheck every two weeks or every month you get comfortable with that paycheck. With that comfort you talk yourself into a little more house, a little more tech, a little more car, etc.

I have a few things I do that have helped me control spending and increase savings. I think they can help you too. Keep in mind that the goal of saving money is to get enough for that first down payment on your very first rental property. If you just simply stash money away each month into a savings account and never invest it, you are actually losing money every month because you are not keeping up with inflation. I do not advise in saving money unless you have a goal to eventually invest that savings. 

  1. Have your savings account in a different bank than your everyday checking. The point of this is to make it harder to get funds from your savings account into your checking account if your expenses go over your budget that month.
  2. Have a portion of your check direct deposited into that savings account. If you can't direct deposit into two accounts, set up an automatic bill pay into your savings. Also, as you get raises increase the amount going into savings vs checking.
  3. Have any bonuses that you receive go directly to your savings accounts as well.
  4. You can also open more than one savings account. You could open several up for different goals…maybe you are savings for a down payment on a rental property, a family vacation or a down payment for your own home. Separate those goals out into their own savings accounts so you can track your progress towards your goals separately. It is too easy to lump all those sums together and tell yourself that you think you're on track. 
  5. Truly analyze your spending. This is not an easy task. The monthly expenses are usually fairly easy…mortgage or rent, utilities, childcare, etc. The once a year bills can add up as well though too…insurance, vehicle registration, professional licenses, family vacations, etc. The other expenses that you have to really keep track of are recurring payments set up on your credit cards. Most credit card companies have a way to see your recurring payments listed via their app or online.  

I hope that this article planted a seed that will help you reach your goals and that it spawned action. I have created a master budget excel file where I list the most common expenses in a yearly table. It might be a good starting point for you to start analyzing where you are at and see how much you could potentially save each month. Please enter your email address below, so I can send it to you. 

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