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Here's how you can spend your money without the guilt.

Written by: Sarah | Original published date: Feb 25, 2022

I always tell people that I spend my money without the guilt. And that's because I covered my money basics every single month before I use my paycheck to budget.In this post, I'm going to share with you how I split my paycheck before using the money to budget for the month.Remember that I used to not do these things at all because I was trying to get by and trying to pay off my debt. Now that I'm debt free and I could, I try my best to set these things up first before spending my paycheck on my responsibilities. So here we go...

First things first...

If you're wondering what the heck are "money basics," let me share with you what my money basics are. They are sort of like my money goals but I have no end date or estimated time to achieve these goals. They're just things I continue to do to cover my future butt ;)My money basics are savings and retirement. I set aside about 20% of my paycheck into these two buckets before using my paycheck for my monthly expenses. As another reminder, you don't have to start at 20%! It took me eight years since I work full-time after college to be able to set aside this much of my paycheck. Tbh 1% is better than nothing at all.

Setting them up automatically...

I'm a big fan of setting everything automatically. Set it and forget it is not only the mantra of cooking with a slow cooker. It should be the mantra for some of your personal finance and budgeting needs too ;) And here's why:

I love that I only need to set things up once and everything will flow the same way every single month.
I don't even see this money in my checking account so I don't get to spend it at all.

Retirement...

If your employer has a retirement program (think about 401K or 403B programs) for their employees, when you're qualified to contribute, you would fill out a form and they will set up the retirement account for you. I personally contribute about 5% of my paycheck to my employer's retirement program.Here's a few benefits on why you would want in:

Your HR/accounting team do the dirty work for you. You just tell them how much you want to contribute and let the money rolls into your retirement account.
Most major companies in the U.S. would match your contribution. You put 1% of your paycheck that equals to an X amount of dollar, your company will contribute the same amount into your retirement account.
The contribution is pre-tax! So the more you put in, the less tax you pay every time you get paid.

Savings...

Tell me you were raised by immigrant parents without telling me you were raised by immigrant parents :)One of the things I heard ever since I started making money is to save, save and save some more. So obviously saving is one my money basics. I set aside about 15% of my paycheck into savings and here's how I split them up.

5% goes to our emergency fund savings account which is stored in a high-yield savings account. Read more about how to open a high-yield savings account here.
5% goes to my own personal savings account (also in a high-yield savings account) and I can use that to buy whatever I want. My husband has similar set up for his paycheck and his own personal savings account.
5% goes to a regular savings account to make sure that we keep up with the minimum balance to avoid those darn monthly fees. Once I have the minimum balance met, I just transfer the excess to our emergency fund.

That's where 20% of my paycheck go first before anything else. And this is why I spend my money on the stuff I enjoy and love without the guilt.I already set aside a portion of my paycheck to cover my money basics. Then I obviously budget for my absolute expenses, or my monthly bills. From there I would budget everything else from paying off debt, saving some more, investing, giving and going on cruises plus much more!Let me direct the question back to you. Are you spending your hard-earned money without the guilt?If you already covered your money basics and your monthly responsibilities, why can't you spend your money on the things you love?

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