One of the tenets of personal finance, and the simple rule that money books tell you to do, is to pay yourself first. Also, your parents are the first persons to give you this advice.
Unfortunatly, many often people use that money for other purposes. They pay down debt, the phone bill, buy a new laptop. They don’t set aside a portion of their income to save, so when next payday comes along, they haven’t more money.
However, as a result of the economic downturn today, become important to put aside a percentage of your income for yourself.
But, the question now is: What does “pay yourself first” even mean? In brief, It means that you must to save your income before you buy groceries, pay your bills, and so on.
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Once you take the habit, you can open an saving account, can help you grow your potential wealth. Of course, if you’re just getting started to work, there’s no money saved at the end of the month. You’ve paid the rent, groceries and maybe your car.
The real difficulty to developing this habit is finding the money to save. So, here, I listed some tips to get started doing this yourself. They each have their advocates, and can all work.
1. First and foremost you’ve need to establishing saving as a priority. Put your saving first to any else things such as car rent, cell phone, and so on.
2. Creating a mental list of things to pay for first. Usually people using their money, first to pay bills, second to fun, and at the end for saving money. It’s obviously that they remains little in the bank. Having money saved in the bank can be useful for emergencies, or use it to save for retirement.
3. Initially, trying to save just 1% of your income, in order that the entire process is painless, then trying to save 3%. or 5%.
3. Paying yourself is a great way to get freedom and open a world of opportunity.
4. If you’re struggling to find money to save, looking if your company offer to match employee contributions and have a retirement plan.
5. Open a high interest savings account at a bank and set up automatic transfers into this account. I reccomend ING Direct or FNBO Direct.
6. The better way to build credible wealth by paying yourself is to earn more money. When your income increases, set your gains aside for retirement and savings.
It’s not never too late to start pay yourselves first. I started saving money just a few years ago. Better late than never.
