dollar-941246_640Some people seem to make more out their paycheck than others, seemingly making their money stretch further and still having some left over at the end of each month.

The odds are high that many of those that manage to make the most of their paycheck tend to use some solid financial strategies that they have learned, which can help you to save big money and allow your cash reserves to last longer.

From negotiating a deal on your next car at somewhere like St. Louis Auto Stop, to saving on your utility bills, there are plenty of ways to save big money.

Working out the percentages

A good financial rule of thumb that can help you to budget your monthly paycheck more effectively, is the 50/30/20 rule.

If you are not familiar with the 50/30/20 rule, it is easy to get to grips with and allows you to see where your money is going and where it should be going, in proportion to how much you earn.

You should be allocating 50% of your income towards the necessities that most of us have to cover each month, such as rent or mortgage payments, plus utility bills and groceries. The next 20% should preferably be going on specific financial goals, like paying off credit card debts and putting money away for retirement. About 10% of that 20% slice towards financial goals, should ideally be going towards retirement savings.

The final 30% of your income can be used for discretionary spending. If the rest of your spending falls within the suggested percentages, this means that you have 30% to spend on entertainment, dining out and other leisure activities.

Creating a balance using these percentages can help you spend your money in proportion and doing the sums will help you to see where perhaps savings or cutbacks need to be made, if you find that you are going over these percentage boundaries.

Another rule to follow when buying your next car

Paying for big ticket items like a car can have far-reaching implications on your regular finances, unless you show some restraint and follow a suggested formula to stay on budget.

The 20/4/10 rule is one that works well when it comes to buying a car, as it provides you with some useful financial guidance based on your salary, that means you don’t overstretch yourself and end up taking on a bigger loan than you can afford.

The aim is to buy a car where you can afford to put down 20% of the value as a deposit. Any finance deal should not be any longer than four years or it could cost you too much in interest charges, and finally, you should aim to spend no more than 10% of your gross income on running and transportation costs.

If the car you are looking at fits this 20/4/10 rule, there is a reasonable chance that it will suit your budget, based on your annual salary.

Always aim to live below your means

There is nothing wrong with having dreams and aspirations, as these are what get most of us out of bed on a Monday morning, but building wealth and assets is something that often takes time.

Those that have built wealth over a period of time often have something in common, which is the fact that they have always aimed to live below their means and understanding the fundamental difference between needs and wants.

If you are really serious about building a solid path that eventually leads you to a comfortable level of financial security, the philosophy of living below your means will stand a good chance of getting you there.

It is a simple equation really. Spending less than you earn each month, will leave you with a surplus of cash that you can put away. You will probably be surprised at just how quickly you can build up a pot of cash when you take your spending habits to task and set out to spend less than you earn, by as big a margin as possible.

It only takes a few subtle changes, such as holding off on buying that coffee on the way to work each morning and taking your own coffee in flask instead, or skipping one meal out each month and eating in for less while watching a movie.

Living below your means doesn’t have to be boring, as you just have to be creative, but the end result of your actions can be very exciting, when you check your savings account balance.

Ava Ward is a personal finance consultant who often works with people to help them get out of debt. She finds that most often, the problem comes with not having learnt money skills, and so helps to educate people on spending and saving.