paying yourself first is the foundation of finance.
it simply means putting money away before you make purchases.
most people are used to covering their expenses for wants before saving money.
What if, instead of paying bills first, you payed yourself?
1. make it mandatory.
We all know what happens if your phone, cable, or electricity bill is unpaid.
Make sure to treat your savings and investing's like bills, by including them as line items in your budget. saving should be a priority, not a discretionary expense.
2. set a personal finance goal.
Make a list of your short and long term financial goals, put it where you can see it. having this list will keep you motivated, and inspire you to keep a strict spending budget.
3. save at least 10%.
you should set aside 10% of your gross income for retirement, or emergencies.
It provides you with a place to start if you are unsure of how much to save.
if your funds are low, or a lot of debt, adjust your savings appropriately, but never completely give up.
4. create a budget.
A budget will give you a sense of financial control, and make it simpler for you to save money. there are budgeting sites and apps. Find a financial tracking system that works best for you.
5. create multiple accounts.
Having several bank accounts is a terrific method to keep money separate, for each of your goals.
A simple approach to determine your progress is to keep your vacation fund, separate from the bill fund.
6. find ways to cut back on spending.
It could be time to make spending cuts if you aren't able to save as much money as you'd like. Determine the non-essentials you can go without, such as entertainment and eating out. think of strategies to save costs on your recurring monthly bills.
7. adjust as needed.
if you discover that you are falling short, seek for methods to reduce your spending. This might entail concentrating on one savings goal at a time, instead of multiple. come up with methods to reduce spending on wants. You can also think about adding side jobs for your income.
8. set up automatic bank transfers.
To succeed at paying yourself first, you will need to set up automatic withdrawals from your paycheck or from your bank account into a savings account. The desire to squander money that you have set aside for savings is lessened. Paying yourself first involves both investing, and conserving money.
9. watch your money grow.
Every month, review your spending plan and assess your results. That will assist you in identifying and resolving any issues, in addition to helping you stay on your personal savings goal.
10. reward yourself.
When you reach a goal, whether it's daily, or monthly, reward yourself.
This reward system is a great way to keep you motivated, and reinforces your saving habit. You'll be on the path to developing the habit to save.
this means being deliberate.
Give names to your accounts and be precise about your goals.
giving a savings account a name, makes it less tempting to withdraw money for silly purposes.
you must do whatever's necessary, when treating your current and future goals as top priority.
