Skip Nav
50 Ways to Feel Better About Yourself
Find Your Happy
50 Ways to Feel Better About Yourself Right Now
Why You Should Spend Time Alone
Self Care
I Cancelled My Weekend Plans to Focus on Self-Care, and I Learned So Much
Travel Hacks
You Can't Go Out in Sydney, So Why Not Try Singapore
Pedestrian Selfish Weekend 2019 Tickets
Music
Attention Sydneysiders: A Festival Dedicated to Self Care and Wellness Is Coming
What is a Multihyphenate Career?
Working From Home
I Have More Than One Job, and I Love My Multihyphenate Career

How Much of My Paycheck Should I Save?

Here's Exactly Where Your Pay Cheque Should Be Spent, According to a Financial Advisor

NEW YORK, NY - JUNE 10:  CEO and Co-Founder of Ellevest Sallie Krawcheck speaks onstage in Image Source: Getty / Brian Ach

It's time to talk about payday, the highly anticipated, holy grail deposit that every human has looked forward to since the day they entered the workforce (or since *NSYNC covered the song "Just Got Paid" in 2000, just saying). But a pay cheque is not to be blown on an expensive pair of shoes or treated as a gift, because for most, it's a means of survival, and it needs to be handled as such. Sure, a shopping spree sounds nice, but so does retiring at a reasonable age and saving for an occasional indulgence, and there's a specific formula to follow to ensure that happens with each pay cheque. Let's break it down, shall we?

It's Friday night and I just, just, just, just, just got paid! So, now what? Sallie Krawcheck is the CEO and cofounder of Ellevest — a digital platform for women to customize investment portfolios based on their specific goals — and she wants us to talk about money. We talk to our friends about sex and the horrors of dating, but avoid light chatter about investments and a 401k like the plague, Krawcheck says. "We are more likely, as a society, to talk about the most intimate of human acts, but when they talk to us about money, either we don't at all or we're infantilised," she told us at POPSUGAR Play/Ground.

When it comes to your salary and the amount you take home after taxes, this is how it should be spent: 50 percent for your needs, 30 percent for fun, and 20 percent for your future. Taking that last 20 percent and putting it into a diversified investment portfolio can change your life, and the sooner you start, the better. However, Krawcheck explained that before thinking about your future, you need to take care of your past and pay off credit card debt immediately (if you have it). Once your debts have been cleared, create a cushion by putting aside money for an emergency fund in case of a crisis. Those potential crises could be health-related or they could arise if your partner moves out or if you lose your job. It's for "all the things you don't want to think about," Krawcheck says, but unfortunately, you need to prepare for them.

Once your credit card debt is paid off, you've established an emergency fund, and you're contributing to your superannuation, then it's time to find a low-cost investment firm and start planning for who Krawcheck refers to as "Esther," her future grandma self. (Pro tip from the money master herself: you can still invest while paying off student loans.) As the former CFO of Citigroup Inc., former head of wealth management at Merrill Lynch, and one of the most powerful women on Wall Street, Krawcheck is changing the way women handle their money. So, do it for your "Esther" and start investing in your future, because the shopping can wait.

More from POPSUGAR
From Our Partners
How to Eat Low-Carb on a Budget
Best Quotes From Celebrities at POPSUGAR Play/Ground 2018
How to Stop Using Credit Cards
Cleaning Hacks
45-Minute Dance Cardio Workout
Kate Hudson Interview at POPSUGAR Play/Ground
Mindy Kaling Interview at POPSUGAR Play/Ground
POPSUGAR Playground 2018 Pictures
Kate Hudson Drunk Dialing Men in Ibiza Story
What Are the Best Book to Movie and TV Adaptations?
Vanessa Morgan Talks About Toni and Cheryl on Riverdale
Tomi Adeyemi Talking About Michael B. Jordan
From Our Partners
Latest Smart Living
All the Latest From Ryan Reynolds