What does it mean to “pay yourself first”? It means that, before you pay any bills (food, utilities, mortgage, credit card bills, discretionary spending, etc.) put some money aside for your savings and investment goals. You should make this effort automatic so it won’t really seem like an effort at all. Paying yourself first indicates that saving is a priority in your life.
There are a number of ways to do this:
1. Have your employer take out a pre-determined percentage of your paycheck and put it into a 401-K or towards the purchase of company stock. Note: some companies match a percentage of your 401-K contribution (Can you say FREE money???), so you should max out your contribution if you can.
2. Set up an automatic transfer directly from your checking account into your savings account. With most banks, you can set this up yourself using their on-line banking services. Set up a recurring transfer to happen automatically on a specific day of the month (preferably on each payday).
3. At the end of the day…every day, put all of the change that you have accumulated during the day into a jar and leave it there. Once it’s in the jar, it is only taken out on the day you take it to the bank. Once a month or every couple of months, make a trip to the bank to make a deposit (This is also a good way to get your children into the habit of saving, but this will be discussed in a later post).
Many people feel that they do not have enough money to save. But I disagree. Even if you have to start with $5 per pay period, as least you are getting started. And as your income level changes, you can increase it.
If you don’t develop a habit of saving early on in life, it’s harder to make that change. I know it often seems like you barely have enough to pay your bills and that there is little or no money left over after you have paid them. But if you get in the habit of paying yourself first, you won’t even miss it, and you will become accustomed to living off of what’s left after saving/investing.
The key is that once the money is put in savings or invested…leave it alone!! Don’t take it out to go on vacation or go shopping or anything like that. You should establish a secondary savings plan for that purpose. So ladies…let’s start today. It’s Friday and payday for some of you. Go on your bank’s website and setup a recurring transfer. For those of you who already save, make a commitment starting today that you will not touch that money. Instead, let it continue to grow. You will be on your way to financial security and empowerment. Until next time…KNOWLEDGE IS POWER!
Dawn-Charmel
There are a number of ways to do this:
1. Have your employer take out a pre-determined percentage of your paycheck and put it into a 401-K or towards the purchase of company stock. Note: some companies match a percentage of your 401-K contribution (Can you say FREE money???), so you should max out your contribution if you can.
2. Set up an automatic transfer directly from your checking account into your savings account. With most banks, you can set this up yourself using their on-line banking services. Set up a recurring transfer to happen automatically on a specific day of the month (preferably on each payday).
3. At the end of the day…every day, put all of the change that you have accumulated during the day into a jar and leave it there. Once it’s in the jar, it is only taken out on the day you take it to the bank. Once a month or every couple of months, make a trip to the bank to make a deposit (This is also a good way to get your children into the habit of saving, but this will be discussed in a later post).
Many people feel that they do not have enough money to save. But I disagree. Even if you have to start with $5 per pay period, as least you are getting started. And as your income level changes, you can increase it.
If you don’t develop a habit of saving early on in life, it’s harder to make that change. I know it often seems like you barely have enough to pay your bills and that there is little or no money left over after you have paid them. But if you get in the habit of paying yourself first, you won’t even miss it, and you will become accustomed to living off of what’s left after saving/investing.
The key is that once the money is put in savings or invested…leave it alone!! Don’t take it out to go on vacation or go shopping or anything like that. You should establish a secondary savings plan for that purpose. So ladies…let’s start today. It’s Friday and payday for some of you. Go on your bank’s website and setup a recurring transfer. For those of you who already save, make a commitment starting today that you will not touch that money. Instead, let it continue to grow. You will be on your way to financial security and empowerment. Until next time…KNOWLEDGE IS POWER!
Dawn-Charmel
