4 Ways To Give Your Bank Account A Makeover After Your Crazy Summer

Milena Milani

Summer is the time to live it up.

You know, eating tacos and drinking margaritas like there was a shortage, taking Ubers home on late nights out and barely pulling enough cash together to split an Airbnb for a weekend getaway with your buds.

Seriously, summer eats up all of your money. And even though it was all probably worth it, damage control is necessary by the time fall rolls around.

Of course, this doesn't mean you'll have to cut back on having fun. It just means you have to give your bank account some well deserved TLC.

Here's are four easy ways you can give your money a makeover this fall, and still have enough cash at the end of the year to buy all your friends and fam some gifts for the holidays:

1. Live below your means.

I'm sure you've heard this vague piece of advice before, but what does living below your means ACTUALLY entail?

Your "means" is your income. Living below it means that your monthly expenses are well below the amount you take home each month.

For example, if you take home $2,500 a month from your job, living below your means would be only spending $2,000 on living costs, while the extra $500 goes toward saving and investing.

This is easiest to do when you pay yourself first.

That means the second you get your paycheck, a percentage of it should automatically go to your savings account, student loans and/or investment accounts. Here's a great resource on setting up automatic savings.

After months and months of consistency with paying yourself first, you'll actually see your accounts start to grow and regularly have money in them. What a nice feeling!

Ideally, you should aim for 15 to 20 percent. You might think you don't even have enough room in your budget for that, but I'm telling you, you do.

For example, this year I took a hard look at my spending history in Mint, my favorite money managing app, to see where my money had gone.

I figured out that for the first two years I lived in NYC, I spent $4,000 on cabs and Ubers.


Taking fewer cabs was an obvious area I could cut back spending without sacrificing the quality of my life.

Once I stopped spending so much on transportation (this was on top of the $117 monthly MetroCard I use), I had lots of free cash to put toward saving and investing.

I figured out that for the first two years I lived in NYC, I spent $4,000 on cabs and Ubers.

Having money feels good. And if you don't really know what that's like to save and see the results of effective saving, it's never too late to start.

You can always use a tool like Fidelity's Budget Checkup to figure out the best way to tweak where your money is going.

2. Get your tax break.

Taxes suck, but we all have to pay them.

There's actually a legal way for you to lower the amount of taxes taken out of your paycheck each month, and that's by upping your contributions to a retirement account like a 401(k) or another tax-advantaged account.

Here's why this works: Taxes are taken out on the income that comes home with you after your contributions to a 401(k). So the more you put toward that account, the fewer taxes you have to pay.

Even though you can't really touch the money in a tax-advantaged account until you're of retirement age, it's still your money, not the governments.

Over time, you end up saving more by contributing more and also having fewer taxes taken out of your income.

In 2016, the most you can contribute to a 401(k) is $18,000 per year. You still have four more months to get your tax break before the end of the year!

So, if you don't have a tax-advantaged account set up, get on it. You don't have to contribute the max, even just a couple hundred dollars can make a massive difference.

3. Put your everyday spending to work.

You guys, I'm telling you, if you don't have a rewards credit card, you're missing out.

You can collect points toward fun stuff like vacations and earn cash-back on everyday expenses like gas and groceries. There's a card out there for every type of reward you can possibly think of.

I'm personally obsessed with my United Mileage Plus card. I've been collecting points on that baby for three years, and I've been able to take a free round-trip flight once a year.

Not sure where to start looking for cards? Check out Nerdwallet. They have a great feature for comparing different types of credit cards.

Do not fear the credit card. Just make sure you pay it in full every month, and that's literally the only credit card rule you really need to stick to.

4. Create a saving, spending and investing formula that works for you.

Money is emotional. Everyone's financial goals are different, but a having a saving and spending formula is the only way to make spending and saving habits stick.

You need to make money management simple and easy for yourself.

Having a saving and spending formula is the only way to make saving and spending habits stick.

Not sure how to create a formula? Fidelity has an awesome one for spending, investing and saving, for example.

Their system is 50 percent of your income goes toward essential living expenses, like rent, food and bills.

Then, 15 percent goes toward retirement and long-term investing.

Five percent should go toward short-term savings, like an emergency fund.

The last 30 percent? Do what you want with it based on what's most important to you.

That actually doesn't sound so bad.

These four ways to makeover your money are really necessary to do at SOME point in life, not just this fall.

Once you have a formula, a better sense of where your spending is going and regular contributions to savings, investment and retirement accounts, you'll really be set for life.

After that, it doesn't take much effort to keep it going. You just have to make sure you keep your steady income.

I'm telling you, start now. And next summer, you'll have even more money to spend on fun stuff like tacos, margaritas and Ubers.