While discussing my recent raise with one of my friends, they said “Don’t worry, it will be very easy to grow into.” I thought about it for a minute and decided I don’t want to grow into my raise. Instead, I developed a plan to reduce my debt and put the extra money into savings.

Here is my strategy:

1. I will keep three bank accounts: a) out-of-pocket expense account, b) bill pay account c) savings account.
2. Every payday I transfer the bulk of my paycheck into my bill pay and savings accounts.
3. I will only keep $200 in my checking account per pay period to use for my out-of-pocket expenses including - gas, groceries, clothes, going out, etc.
4. After I pay all my bills for the month and pay off a considerable amount of my credit card debt, anything left in the bill pay account will be transferred to savings.
5. I should be able to eliminate my credit card debt quickly. Once the credit card debt is paid off, that money will go directly into my savings account rather than the bill pay account.

The goals are to reduce frivolous spending, eliminate debt, and grow my savings account.