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5 Steps When You Get Paid (Follow These) - YouTube
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hey what's going on you guys welcome
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back to the channel so today we're gonna
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be talking about the five steps you need
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to follow when you get paid so we got
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the bank behind me here we're gonna go
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ahead and pretend it's payday and so the
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very first step that most people follow
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is they go to the bank and they cash
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their paycheck and we're gonna talk
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about the five things that you should be
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doing immediately after that all right
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guys so the very first step that you
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want to follow when you get paid
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actually comes from this book right here
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it's called the richest man in Babylon
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which is one of the best books I've ever
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read out there just on basic money
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skills I'll go ahead and link up to it
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in the description below if you guys
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want to check it out but this is a
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concept called pay yourself first and
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where people go wrong when they get paid
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is they oftentimes immediately start
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paying everybody else except for
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themselves they pay the cable company
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they pay the utility company they pay
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for their mortgage and I'm not saying
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don't pay for these things because
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obviously you have to but what I'm
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saying instead is on payday you
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immediately take a portion of your
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paycheck out from your total paycheck
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and you set that aside in your savings
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now you don't have to go crazy with this
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at first in fact you could start with
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just 1% or 2% of your paycheck but you
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want to get in this habit of on payday
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taking a chunk of that money and setting
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it aside for yourself now most experts
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out there recommend saving and investing
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anywhere from five to twenty percent of
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your paycheck and I know that's a lot of
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money for most people so again you can
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just start with just one or two percent
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but I definitely recommend working your
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way up from there and one thing I will
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recommend is you take this money and
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you're gonna put it in a separate
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savings account there's a number of
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different online savings accounts out
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there I'll actually link up to one in
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the description that currently pays
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about a 2% APY which is a lot higher
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interest than you're gonna get from a
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traditional bank out there but you're
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gonna put that in a separate savings
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account that way you don't confuse it
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with any other money out there this is
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going to be your emergency fund or your
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rainy day fund and the first goal you
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should have for yourself is to save up
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$1,000 in this account that will serve
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as your emergency fund
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so just to recap here step number one
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when you get paid is to pay yourself
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first and if you don't have it already
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begin building up
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that emergency fund alright so step
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number two when you get paid is a simple
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one but a lot of people don't think of
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it and that is to go to the gas station
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and fill your car up with gas so a lot
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of people don't think of this and this
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is what they end up doing they get their
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paycheck on Friday they cash that
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paycheck they go out and blow money all
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weekend and then Monday morning comes
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around they're rushing to work and they
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realize that they have no gas so they
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end up going to the gas station and
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filling up their gas tank using their
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credit card so on Friday on pay day
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right after you pay yourself the next
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step is go to the gas station and fill
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your tank up with gas because you're
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going to need it anyway alright so step
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number three when you get paid is a
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simple one but that is to go to the
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grocery store so I wanted to show you
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guys just how much more money you spend
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by buying fast food versus making stuff
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from the grocery store so I actually
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just ran through Dunkin Donuts and I
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bought like a basic breakfast sandwich
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and a coffee and now we're gonna buy
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those exact same supplies at the grocery
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store and compare the cost of both of
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these alright guys so we went ahead and
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prepared our replica breakfast sandwich
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here of the one that we just bought at
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Dunkin Donuts just to recap for you guys
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we ended up spending six dollars and
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eighty three cents for a Dunkin Donuts
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breakfast sandwich and a medium coffee
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and that price broke down to three
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dollars and 99 cents for the breakfast
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sandwich you see here which is obviously
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ham egg and cheese on an English muffin
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and then it was two dollars and thirty
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nine cents for the coffee so we were
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able to stock up on a number of
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different items while we were at the
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grocery store for example English
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muffins were actually buy one get two
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free so we ended up getting 18 of those
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and you can literally just pop those
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extra English muffins in the freezer and
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they're gonna be good for a lot longer
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you just saw them as needed for the week
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so we spent four dollars and 49 cents on
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a teen English muffins which works out
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to 25 cents per English muffin per
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breakfast sandwich we also picked up a
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dozen eggs for a dollar 49 which ends up
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being a price of about 12 cents per egg
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next up we picked up a good amount of
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ham for five dollars and thirty nine
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cents now the smallest one we could find
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was about one pound and so we divided
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that out across five days which is about
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how long ham is good for and that ends
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up being a dollar in seven cents per
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serving on our bread
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for sandwich but if you wanted to be
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even cheaper you could definitely cut
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back on the ham and then finally the big
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area where we're saving money is making
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coffee at home we got about a pound of
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coffee for $2.99 which we can actually
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make 68 servings of coffee with if we
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want to be as frugal as possible which
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ends up being a price of just four cents
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per cup of coffee versus two dollars and
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thirty nine cents from Dunkin Donuts so
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for this meal right here that you're
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looking at we're spending a dollar and
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forty eight cents per meal versus
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spending over four times more at Dunkin
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Donuts which ends up costing six dollars
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and eighty three cents per meal
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so the big thing that I like to do is
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look at the savings over the course of
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one year and if you do this five days
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per week make your breakfast at home
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rather than buying your breakfast out
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the exact savings is one thousand three
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hundred ninety one dollars per year is
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what you can save by simply eating one
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meal at home versus buying breakfast and
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not to mention most people buy both
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breakfast and lunch out of the house so
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you could easily double that savings by
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doing exactly this but also doing the
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same thing for lunch and bringing your
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own lunch to work all right guys so step
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number four when you get paid is in my
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opinion one of the most important ones
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because this is an area where people
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totally just blow all of their money and
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that is your entertainment expenses so
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what I actually recommend doing is not
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only having a budget for your
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entertainment expenses but actually take
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that money out of the bank and I'm a big
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fan of the envelope system and literally
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put that money inside an envelope
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labeled entertainment expenses so right
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here I have $100 cash let's say for
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example that was my entertainment
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expenses for the next two weeks well
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what you would do is when you're going
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out to the bar or when you're going out
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for a meal with your girlfriend or
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whatever you're gonna take that money
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out of this envelope and then the key is
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and this is where most people go wrong
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once the envelope is empty you don't
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spend any more money on entertainment
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until you replenish that envelope on
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your next payday so figure out in
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advance what you're going to be spending
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on entertainment if you get paid weekly
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or bi-weekly adjust accordingly and then
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set that money aside put it in an
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envelope labeled entertainment and
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we spend what it is that you have here
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and as an advantage if you want to you
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could definitely save that money for a
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couple of weeks and let it accumulate
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and then spend your money on a larger
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entertainment expense alright guys and
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number five the fifth and final step
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when you get paid after you've followed
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the steps prior is to start paying off
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some of your debt now a lot of people
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may argue with me on this one as far as
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should you be saving money before you
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start paying off debt and I think you
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should have a $1,000 cash cushion saved
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up as a minimum before you start paying
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off your debt because as good as it
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would be to put the majority of your
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paycheck towards your debt well if next
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week you turn around and you have to
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swipe that credit card again you're
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going to be in that exact same situation
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now there's basically two schools of
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thought when it comes to paying down
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your debt number one is to simply pay
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off the highest interest debt first
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which is what makes most sense
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financially but the strategy a lot of
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people actually like to follow these
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days is to pay off the smallest dollar
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amount first so let's say you had maybe
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a two hundred dollar Walmart credit card
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maybe you would pay that off first
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because you can knock that right out
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pretty easily and establish that
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momentum but that's up to you guys
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whatever strategy makes more sense to
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you but once you follow these other
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steps and you have that emergency fund
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in place it's now time to begin paying
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off that debt and eventually getting to
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a point where you don't have any of that
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bad debt the credit card debt or the
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medical bills or things like that but
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anyways guys that's going to wrap up
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this video those are the five steps that
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I recommend taking when you get paid let
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me know what you think down in the
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comment section below do you agree with
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these steps or do you disagree I'm
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curious what you guys think about that
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and if you're new to this channel and
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you're looking for more tips and advice
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about money saving and investing in
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things related to that nature make sure
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you subscribe and hit that Bell for
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notifications of future uploads but
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thanks so much for watching this video I
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hope you enjoyed it and I will see you
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in the next one
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