Track Your Spending to Save More Money

Escaping the Paycheck to Paycheck Life

Keep 403(b) contributions at 10%: Since starting to save for retirement in early October, White says she can feel the difference. Her biweekly paychecks are $183 less and she’s considering reducing the amount. Brown recommends she stick it out. By saving 10% she can grow her savings to more than $1 million by age 65. Just a 3% decrease can result in $300,000 less in savings.

Pay off student loans sooner: White is currently paying $230 a month on her $47,900 student loan balance. She is on a graduated payment plan, which increases her payment by 12.9% every two years. Under this plan, it will take her 20 years to wipe out the debt. Brown calculates that if White increases her payments to $400 a month she can pay off her student loans in 10 years. After funding her emergency account she can apply $175 from the $250 she was paying toward her credit card debt plus the $250 she is currently paying to pay off her student  loans earlier.

“She is on the right path,” says Brown. “But because she is still finding areas to cut she should revisit her progress in about three months and see how she’s doing and make adjustments as necessary.”