Five-step pay day routine that you need to do as soon as you get paid to help make you richer

THERE’S no better feeling than checking your bank balance on pay day.

But it’s easy to fritter the money away, and leave yourself struggling to make it until your next pay check.

Want to make your money last the whole month? Follow our step-by-step guide[/caption]

Follow our six-step payday plan so you’ll never feel the pinch towards the end of the month again. ROSIE MURRAY-WEST explains.

1. Read your payslip

Do you bother reading your payslip each month? If not, it’s time to start.

“The first step to nailing your payday routine is making sure you’re being paid the right amount of money,” says chartered accountant Pernia Rogers, who runs the personal finance blog Your Finance Buddy.

Check yours for any errors. A quarter of workers have received an incorrect payslip at some point, according to the Global Payroll Association. 

There are 30.3million workers on the payroll – which means that as many as 7.5million people could have been hit by errors.

Common mistakes to look out for include being paid too little or too much, not receiving the right pension contributions, or given the wrong tax code.

Most people are on the 1257L code. If you’ve changed jobs recently, you may see a code like C0T, W1, M1 or X, which are emergency tax codes – which means you’re paying far more than you should.

Pernia says each payroll error costs employees £220 on average.

So if you have four payday errors over your whole career, that’s £880 you’re missing out on.

2. Choose your savings method  – from potting to flash cash

With a cost of living crisis still pinching at our wallets, it can be a struggle to lock away cash in our savings.

But a shake-up to the way you save could be the key to slowly building up a nest egg.

Consider the “spending potting” method, where you open lots of different pots for your money, and allocate a certain amount for each one, depending on what it’s for.

Some people withdraw cash and stuff it in envelopes, but beware – you may lose it.

A safer way is to use a bank, like Monzo, which lets you set up pots within one bank account.

A sensible way to split it would be for your rent or mortgage, food, household bills and subscriptions like the gym or Netflix.

Guilty of overspending? Try the “flash cash” method, where you set aside money for nice-to-have things, like social events, clothes, and treats.

The idea behind this is that by budgeting a sensible amount for “fun”, you’re less likely to impulsively splurge.

Check your savings rate beats the current rate of inflation (3.6 per cent) to stop the buying power of your money being eroded.

The best savings rate is 4.84 per cent, offered by Chip.

3. Get ready for “busy” spending months

You’ve got a birthday party to throw, the car is booked in for an MOT, and the kids are going back to school… all in one month.

But don’t panic – there’s a way to budget for all those added extra expenses.

The key is to get organised, and start setting aside extra cash as early as you can.

Sit down with your diary at the beginning of the year, and mark all the important money dates.

See where you can cut back your “fun” spending during quieter months.

Then stash that cash away into your high interest savings account in preparation for busier months.

You can even use apps to help you save so you know you’re on track creating a buffer.

The money saving app Plum has a feature where it will automatically save money on pay day. For quieter months, you can set it so that you’re saving more.

Worried about Christmas? Try a savings challenge, and make it fun.

Every time you hear Mariah Carey’s “All I want for Christmas is You” in the shop during the festive period, pop a quid in your savings.

4. The highlighter method to help you keep on track

Before your next pay day, check your bank statement to make sure you’re on track with any financial goals you have.

That could be anything from saving for next year’s holiday, Christmas, or a deposit for a house.

A good way of doing this is to use the “highlighter trick”, according to Pernia.

If you have a printer, print out your bank statement and highlight any purchases that seem unnecessary or you think you could cut next month.

If you don’t have a printer, open your bank statement and jot down these purchases on a notepad.

“This can help you control your spending, and change any bad spending habits,” Pernia said. 

5. Set your payday goal

This should be one positive financial change you are planning to make for the upcoming month. 

It could be as simple as cancelling a subscription you never use, removing a card from your Apple wallet so it is harder to spend with it, or haggling with your broadband supplier for a bill reduction.

One small change twelve times a year could save you hundreds of pounds over time, says Pernia.

“Small positive changes made regularly have profound impacts on your personal finances,” Pernia says.