Pay Yourself First

Paying yourself first literally means paying yourself first before you spend your money. If you made $1000, put the $100 towards your savings, retirement fund or investment account. The remaining $900 is your spending money which is for your bills, food, necessities and entertainment.

The purpose of paying yourself first is to make sure that you set aside money first before you end up spending it away. This is a strategy to make sure that you are maximizing your savings capacity. Many people who don’t have the habit of paying themselves first can easily spend over their budget and put away less than their planned savings.

Saving Mistakes

The mistake people do when saving is, they spend first and then save what is left. This is the wrong way of saving. People who has no spending control tend to overspend and this leads them to have less or no savings left. Therefore, it is important to secure an amount from your paycheck before you spend it. Put the money where you can not access it easily. If you want to save a hundred dollars, put that money away before you lose it. Keep it out of reach till it is needed. You then adjust your spending budget to your remaining cash.

Sometimes, we find good deals, but others waste them. Some buy things on sale and then buy more other things out of the savings from their discounts. The idea of buying discounted deals is to save. What does this mean? If you bought an item at a discount, the money you saved should go straight to savings. Spending more because you saved some money is not the best way to benefit from a discount. Sometimes people save a penny then spend a penny but sometimes, they end up spending a buck.

Saving is simple but you still need to put the effort in order to make a life changing effect on your future.

Remember the order. When you get paid, you save first. Put a stash away where it benefits your future. Make sure it can not be taken out easily. After you secure the funds, you can then spend the rest. If you end up having excess cash from your spending money, put it towards your savings. It should be your goal to save 10% of your income at the very least.

The 24-Hour Rule

The 24-hour rule is very simple. When you feel urged to buy something, wait 24 hours before buying it. If you still feel urged to buy after waiting 24 hours, go ahead and do so. In many cases, people realize that the urges they have are temporary after sleeping them off.

The problem with buying because of an urge is that it often ends up becoming a waste of space and money. It would have been better if the money was parked at a high interest savings account and maybe, the item could have been bought cheaper later when it is really needed. One may even realize later on that the item has no value at all.

Everything Big Starts from Saving

Want to start a business? Do you want to buy a house? Maybe you want to start investing? All these start by saving first. Everything costs money. In order to make more money, you also need a reasonable capital to grow your income and savings further. As time go by, we need to build a growing savings account because if we don’t, we may find ourselves become poorer just through inflation alone.

Schools don't teach us how to save properly. Instead, they teach us how to become good workers. It's the only safe way they know how to makes us part of a functioning society. This is the reason why parents should be financially educated and be able to teach their children how to save. Whether people like it or not, saving very little can only make a difference for short-term goals. Long-term goals however require bigger savings and greater sacrifices. These long-term goals are the ones that affects your future, retirement and quality of life. We are all responsible of educating ourselves to set our own future. Our future depends on what we do right now.

Conclusion

Paying yourself first should be a habit to learn as early as possible. There is just no benefit on spending now and have mediocre things later on in life. We should all focus on investing towards our future first before spending our money today.

Some people argue that your money will not mean much when you're too old to enjoy it. If we exercise and eat healthy food, we might just growing older, healthy and strong. We are now living with internet feeding us all the information we need. We can read a library right in our hands. I get amazed by people choosing lazy excuses so they can spend all their money now.

The best part about paying yourself first is that it teaches you how to budget and by practice, you become good at it. Even if you make $2000 per month, you get used to spending $1800 or maybe you can bring it down to $1500 one day. Budgeting is a very beneficial skill to learn. It's a life skill that plays a big role on your savings and also your future.

Money does not make one happy but what it does helps one become happier.