How to Make the Most of Your Paycheck
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How to Make the Most of Your Paycheck


No matter where you are in your career, especially if you’re just starting out, it’s always important to start thinking about the future. In light of the pandemic and large amounts of government spending, Social Security may no longer be a reliable source of money for retirement (CNBC). 

Even during hard times, if you’re living from paycheck to paycheck, you’ll want to think about areas you can save. If you don’t have a savings or investment plan then it’s easy to spend your money unwisely. The first step is just getting started. Let’s explore how you can create an investment plan on a limited budget.

Create an Investment Plan: Tips for making smart decisions with money

When creating an investment plan, first assess your current financial situation. If you don’t already have strong insights into your financials, you should put together a budget to evaluate your average monthly income, expenses, and savings. You’ll then know how much you can afford to invest. 

Next, ask yourself what your goals are. Are you saving for retirement? Saving to buy a house? Saving for your family? Once you know what you’re saving for, think about how much you’ll need to reach that goal.

Even if you feel like you don’t have much to set a side right now, just getting started with a small amount is better than nothing. For example saving only $50 a month, adds up to $600 over a year. Or you can try cutting out something that seems small, like buying that daily cup of coffee from Starbucks – $5 a day, 5 days a week is over $100 a month. You can then build on that momentum and start to grow it. Setting up an automated savings plan will help you get in the habit of automatically putting money aside.

Age VS Acceptable Risk

Know how much you can risk. As a general rule of thumb, the younger you are, the more time is on your side and you can afford to make riskier investments. Typically investments with hire growth potential are also higher risk. However, if you’re older and you have less time to reach your investment goals you should seek more conservative investments. (SmartAsset)

To get an idea of how much you can afford to risk, use this common formula: 100 – age = percentage of investments.

So for example, if you’re 30 years old you should be able to afford to risk 70% of your assets in investments (100-30 = 70).

However, that is just a starting point. For a more detailed risk tolerance calculator, click here.

The most common advice is to diversify your investment portfolio, so you don’t have all your eggs in one basket. You can choose to invest in stocks, bonds, investment funds, and/or annuities. 

If your employer offers a 401K plan then take advantage of it, especially if they offer a match to your contribution. Most experts recommend contributing 10-15% of your income to your 401K.

If you don’t have an employee sponsored 401K plan, that’s ok, you can still plan for retirement. You can choose to invest in Exchange Traded Funds or Mutual Funds on your own. For more tips from the experts for beginners on a limited budget read here.

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Buy What You Know

A key point of advice when it comes to investing is to make investments in what you know. If you already have strong knowledge in one of the following areas, they may be good ones for you to start investing in.

Invest in Art

In general art is usually a strong investment for the few that have millions to spend on it. However, if you are an insider in the art market, understand market trends, and have direct relationships with galleries, and artists to get discounts, then purchasing a few key investment pieces may work for you. 

Invest in Real Estate 

Real Estate is another good area to invest in if you’re knowledgeable about property trends and can afford to make a down payment in an up and coming neighborhood. In that case, you may want to think about buying a condo or home. Paying rent endlessly is essentially money down the drain. Instead of monthly rent checks, that money is better used towards a mortgage as an investment in your future.

Some Fun Bad Decisions

While we’ve covered some smart investments to make, certain purchases or investments may seem harmless or even like a good idea at the time, but we’ll show that it’s not the best use of your money. Let’s explore some of these examples.

Get That Convertible of Your Dreams

After a big payday, it may be tempting to get that expensive car you’ve had your eye on for years. Why not treat yourself to something nice? I mean, it’s the ultimate sign of success.

Although it may look and feel great immediately, an expensive car is a sure way to waste your hard-earned money. A car is a long term investment and will only depreciate in value over time, which is why it’s best to focus on reliability over flashiness.

Put It All In Savings

It’s always better to save money than to spend it right?


Although putting your money in a savings account seems like the smart thing to do because you’re not spending it. It’s not necessarily the best use of all your saved money, because it’ll really just sit there. Moreover, if the interest rate of your savings account doesn’t keep up with inflation, then you can actually lose money (Student Loan Hero).

Take a Trip Somewhere Exotic During Covid

While this one may be a little self-explanatory, let’s be real. Traveling extensively during a pandemic is not a good idea. Period. 

Get The Ultimate Tattoo

Why not spend your money on the perfect tattoo? You’ve thought about it long and hard and have landed on the perfect design. 

The bottom line is a tattoo is not an investment. Like the flashy car, it’s not a good use of your money. Also, are you really ready to live with it for the rest of your life?

Investing in SNAP

SNAP stock has been surprising investors recently, by outperforming Wall Streets’ expectations. So should you jump on the stock while it’s hot? Probably not, according to Investors Business Daily, it’s still risky to buy.

However, if you’re at a point where you can afford to take some more risks with your investments, SNAP might be one that pays off.

Buy Some Cryptocurrency

Everyone has been talking about Bitcoin. Regardless if you fully understand what cryptocurrency is and how it works, it’s popularity indicates that it must be a totally sound investment. Right?

That’s not the case, while Bitcoin may be hot, it’s what The Guardian explains is a “speculative investment” it only has value because people think they’ll be able to sell it for a lot more in the future. The value of Bitcoin isn’t based on anything concrete. The same article explains that real investments have “intrinsic value”, meaning that they are financially worth owning regardless if you plan to resell them or not in the future.

That said, Bitcoin, like SNAP may work for you if you’re at a point where you can afford to make very risky investments.

Get Botox 

We do not judge at ARTERNAL. Happiness is happiness. But we proud ourselves in being data-driven. And looking at the numbers is it a good long-term investment? For some, especially those in the entertainment focused industry, youth, and beauty may be worth going under the knife. But if you’re looking to spend your dollars wisely, we don’t recommend Botox. Also, it’s painful. Enough said.


While money management is a personal decision and we don’t judge how people choose to spend their money. If you’re looking to make smarter decisions, we recommend a combination of investing and saving is the best way to go.

The bottom line is that there are a number of different investment strategies you can make and the right ones will vary based on your financial circumstances and goals, you may want to consult a financial advisor to determine what route is best for you.

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