4. ALLOCATE FUNDS FOR YOUR NEST EGG AND "WANTS" COSTS

So let's say that you get some of that allowance from your parents, you get a bonus at work, and you're left with $300 extra cash per month. Time to hit the casinos, right? Well, perhaps. Once you have your money set aside for the basic needs, the rest of the money is your "spending money." Obviously, there's no way we can fully detail all the things you'll have to spend money on, but think of your costs for entertainment, clothes, alcohol, a new stereo, cell phone, dinners out, strippers, vacations, and so on.

Because each week is different, it's hard to budget your spending money to the cent. But what you can do is keep track (preferably on paper) of your spending so that you pace yourself until the next payday. The best advice we can give you is to be aware of all your purchases, and think twice about a big splurge (do you really need a $400 pair of cashmere socks?).

Saving money

Maybe, just maybe, you want to save money. And if you're smart, you probably do - you never know what's going to happen. What if a dinosaur eats your car? Life is unpredictable and if you do lose your job, you'll need some money until you get back on your feet. Or maybe you're planning to get married and have kids - you'll be shelling out some major money for the bundle of drool (we mean, "kid"). Some people even start saving for their retirement (it's disgusting).

Hence, you may want to make "savings" a part of your "needs." If so, just add it in (after you pay the bills, you can transfer the remainder into an actual savings account) - and we commend you for your diligence. You can laugh at those working until they're 80 years old.

If you'd rather vary the amount you'll deposit into a savings account each week, that's fine too. The best strategy is to set up an actual savings account (separate from your checking account) with your bank. Then, each week, as soon as you get your paycheck, transfer however much you'd like right into that account. Some banks allow you to do this right over the Web. And don't forget, you'll get interest on your savings… hey, it does add up over time.

Example: Imelda's savings

Let's say Imelda decides to put $100 away for savings each week. This adds up to more than $5,000 every year, so in just 10 years, she'll have exactly $52,000 in the bank. And if interest is a conservative 1.16%, she will actually have over $60,000 in the bank. Not bad from just $100 a week, eh?