Step 2-Systematize Your Spending

Having a bank and planning your expenses will help you prepare for your spending, but putting a system in place will greatly increase your chances of living below your means. Such a budgeting system might include the following:

  1. Automating your bill payments through your bank or credit union
  2. Setting up direct debit payments with your lenders, utility companies, and phone service plan provider
  3. Setting up automatic deposits or transfers to various savings and investment accounts
  4. Adding reminders to your calendar so you won’t forget important bills and expenses
  5. Dividing your paycheck into categorized envelopes that you use for very specific purposes throughout the month

Look for or develop a system that works for you and your situation. No system works perfectly for everybody, so plan to make adjustments over time. With practice and modification, your system can make saving, investing, and spending as easy as waking up in the morning.

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