One paycheck can make a difference. Summer solstice falls on June 20, so now is the time to start thinking about the impact your last paycheck of spring can have on your financial future.
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Spending or saving this paycheck a bit more mindfully can make you richer in more ways than one. GOBankingRates spoke with two financial experts who offered these six easy ways to get started.
Automate Future Pay Raises
Your last paycheck of spring might not include a pay raise, but that doesn’t mean you can’t prepare for one in the future.
“A lot of people don’t realize their 401(k) has an auto-escalation feature that can automatically increase their contributions with each raise,” said Paulo Lopes, JD, founder and financial planner at Woodmont Financial Partners. “It’s a set-it-and-forget-it way to grow your retirement savings without feeling it in your day-to-day budget.”
Even if you’re able to increase your contribution by 1%, he said it can make a big difference over time.
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Use the ’10-Year Test’ Before Making a Major Purchase
“Before making a big purchase, ask yourself: ‘Will I even remember this in 10 years?'” Lopes said. “If the answer is no, maybe reconsider.”
He said spending money in areas like professional development or on a high-quality appliance are a great investment. However, he advised against purchasing the latest gadget that you’ll likely forget about in a month.
“Future You will be really happy you made the right call,” he said.
Create an Escape Plan
Even if you love your job, Lopes said this can be a great time to make sure you have financial flexibility.
“I had a professor in undergrad talk about this concept 20 years ago, and it stuck with me, because it’s true,” he said. “Even if you love your job, you never want to be in a position where you have to stay, because you can’t afford to leave.”
Therefore, he recommended using your last paycheck of spring to bulk up your emergency fund or start a side hustle that gives you options.
“Even putting aside a little extra savings now can make a huge difference if things ever change down the road,” he said.
Build a ‘Fun Fund’
Creating a budget that’s too restrictive — especially with the summer months approaching — sets yourself up for failure, Lopes said.
“That’s why I always recommend setting up a ‘fun fund’ — money that’s guilt-free and meant for enjoying life,” he suggested. “If you use your last paycheck of spring to set this up now, you won’t feel guilty about spending later, and you’ll be way less likely to dip into savings or rack up credit card debt when those fun opportunities come up.”
Invest in Yourself
Dedicating a portion of your spring paycheck to self-improvement is an investment you won’t regret.
“Maybe you learn a new skill on Coursera or take a class at a local community college,” said Noah Damsky, chartered financial analyst (CFA) and founder and wealth advisor at Marina Wealth Advisors in Los Angeles.
“Perhaps you’re trying to keep up with technology or just trying to keep your mind active — keeping your mind fresh is best for your personal and professional life.”
Treat Someone Else
“Helping a loved one or those in need can give you a sense of fulfillment that energizes you to do great things,” Damsky said. “Don’t underestimate the power of generosity.”
This can be anything that fits your budget, so find a worthy cause and commit to it.
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This article originally appeared on GOBankingRates.com: 6 Ways To Make Yourself Richer With Your Last Paycheck of Spring
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
