Do you struggle with saving? Then you obviously have not read my 5 essential tips for savings!! If you still need an extra boost then check this out…why not ‘pay yourself first’ which is essentially setting aside money for savings when you get your pay cheque before taking care of all your bills and personal expenses. “Oh but what about my mortgage, rent or EE phone bill” I hear you say? “If I don’t pay them then I will get bad credit or worse still I will get kicked out my home!” If these were the first thoughts that came to your mind then essentially what you have done is created the mentality that there is a material consequence which will significantly be detrimental to your life. Hence you have made bills your priority.
Well yes don’t get me wrong, liabilities are very important but so are YOU too and your financial objectives…right!? Let’s start by asking ourself some questions, how important is your financial goal…are there not severe consequences if this is missed too? Why am I not financially investing in me and my future first? YES you are getting there now…the point is you deserve to get paid too, you are just as important as your rent or mortgage, so it’s time to treat your financial goals as the number one priority!
Remember, when you pay yourself first, you ensure that the specified amount of money you want to save really does make it into your savings account or investments before you have the money to spend it on something else. Not only does this help you prioritise your savings, but it also helps you develop good financial habits and it creates a cushion for financial emergencies.
Still a bit worried you will run out of cash? Well I personally after paying myself first (A LOT cause I’m worth it), enjoy the thrill and excitement of making sure every expense gets paid. Everyday I’m HUSTLIN 😀 😀
Go on give it a try, I am sure you will surprise yourself that you are actually able to live on the rest of your income, go out on date nights, do your weekly grocery shop and meet all your liabilities comfortably.
So how does ‘paying yourself first’ work?
How much can you afford
The first step to take is figuring out how much your expenses are and then seeing if you can make small changes in your spending habits by making small changes such as taking your own lunch to work 3 times a week. That will help you understand exactly how much you can afford to save when the pay cheque arrives without foregoing those important expenses.
Set your goals
What are your financial goals? It could be to buy a house, saving for a holiday, a car, wedding or holiday. Whatever your financial goal is, determine how much of your salary you need to save and if needed, make some sacrifices in order to meet it with the savings from paying yourself first.
Prepare a saving strategy
Once you have figured out how much you want to pay yourself, simply set up an automated transfer on a monthly basis on your pay date and the rest will take care of itself. This bit is oh so crucial. Automatic means out of sight out of mind. You’ll never even know it’s missing.
So there you have it…let us know how you get along with putting yourself first by paying yourself first this month end…it’s a habit you will never ever regret!
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