Here’s my little experience on why you should pay yourself first. Couples months ago I thought I was paying myself first, but instead, I was budgeting everything at first and kept what left to add to my saving or investment account.
This is the wrong way to do it. With this method, I was over budgeting in a lot of fun category like dining out and was not limiting myself to only what I needed. After couples month, I finished with nothing left to save and thought that would be impossible to cut anything.
Pay yourself first, what it means ?
Pay yourself first mean that you should pay you as the first person or first bill when you receive your money.
After realizing that, I started paying myself first and budgeting everything else with what I was left with. This way I lowered my dining out
You should follow 3 simples steps:
- Pay yourself
- Pay your bills
- Other thing
With these 3 steps, you will make sure that you will pay yourself first, your bill. You will adjust the other spending categories like groceries and fun money with what left after the 2 first steps.
To start paying myself first, I started with a 10$ saving by week. Now, I am saving between 50$ to 100$ by week. I started with a small amount to be able to do it since I thought I couldn’t cut anything more. And every couple week, I put more than what
A small tip, it can be easier if you set a percentage. If you have a variable income, that way it will adjust automatically. That way, you will save less when you get less money and more when you get more. Also, that way, you are sure that if you get a raise, you will raise your saving too without having to think
Pay yourself on every money entries
Every time you have some money entries, start by paying yourself first. After paying yourself, use the rest to pay off your debt or budget it. You get some tax refund ? You can read the 11 smart ways to use your tax refund and get some trick to pay yourself first like creating an emergency fund or invest that money.
Most of the bank can set-up an automatically or pre-authorized saving plan. So that way, when you get money, it going in your saving account. That way it will be harder to touch that money. It’s easier to say that you will save money next week than moving your money from the saving account and use it.
Analyze and review
I recommend that you put a reminder on your calendar every 6 months and analyze and review that percentage or the amount of dollar you are saving. How the human is made, you will try to improve that amount to be higher and you will analyze your spending and question how you can optimize it more. Can you cut your daily coffee from the
Once you have analyze, you will be able to review the amount and modify the pre-authorized or automatically saving plan you’ve set up to reflect the amount you are able now. So that way, you will not post-pone paying yourself first more money.Get your latest credit score from TransUnion for $ 19.95. Unlimited access and alerts to credit changes. Cancel anytime. See what’s on your credit report today!
Just do it
You should always pay yourself first. It’s not always easy at the beginning but it will be easier once the habit is hard wired in your life.
These are my trick I used to save more. Readers, are you paying yourself first?
By the way, you know that you could get your own blog with Tecany Hosting? For $1.95/month, you will have the hosting you need to start sharing your own experience on your own blog.