How a Payroll Company Can Help Your Employees

Source: Free Digital Photos

Source: Free Digital Photos

Managing personal finances can be difficult. Proper management requires an investment of your time. While getting paid more would certainly help, there are other ways to get on track and stay there. In fact, even a payroll company can provide resources to keep your financial situation moving in the right direction.

Steps to Manage Finances

To make smart decisions about personal finances, consider using these three steps:

  • Create a personal budget
  • Use a disciplined approach to save money and pay down debt
  • Monitor your progress

If you follow this process, you can make better decisions about your finances.

Creating a Realistic Budget

One great resource for creating a personal budget is the book, The Richest Man in Babylon. The book provides timeless advice for money management. One of the tips is to “Pay Yourself First.” When you create a budget, your first priority should be to set aside money to save.

Your budget needs to be realistic. That means that you need to think carefully about the portion of your budget that is flexible. Some of your spending is fixed. You may have set amount to pay for housing, your car and certain forms of debt. Those payments are locked in. However, you do have some choices about spending that can vary.

You can find money to save by cutting your variable spending. Think about the money you spend on entertainment, for example. Say that you spend $300 a month on seeing movies and going out to dinner. If you change your spending habits, you can use some of that entertainment money for savings. Maybe you decide to cut out a few dinners and save $100 each month.

Your budget does not have to be sophisticated. You can simply write down the money you receive from your paycheck and all of your spending categories in a notebook. If you’re interested in budgeting software, there are some great choices that are not expensive.

A Disciplined Approach

Even if you plan to save that $100, it may be difficult to actually move the money into a savings account. One way to apply some self-discipline is to use technology. ADP Electronic Payment Systems & Services explains that payroll companies are making electronic payment more accessible for workers.

Many payroll firms can now issue pay cards. These cards allow the employee to access their payroll dollars without needing a bank account. The pay amount is posted to the card, which the worker can use to withdraw funds.

If you have your payroll processed electronically, you can also set up an automatic deposit of part or all of your pay into a savings account. By making the process automatic, you’re not tempted to spend the money for some other purpose.

Paying Down Debt

Technology can also help you set up a system to pay down debt at a faster rate. Assume that you have three credit card balances. If you can pay each balance online, you can discipline yourself to pay more than the minimum payment.

Let’s assume that one of your credit cards requires a $100 minimum payment for the month. In your budgeting process, you set aside $50 to make higher payments on your card balances. By paying more than the minimum payment, you reduce the principal balance on the debt faster.

Don’t hesitate to use technology to help you with your finances. To monitor your progress, check your credit card use and bank account activity online. That step will help you stay on track.

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