It may appear surreal to speak about paying yourself first when you’re faced with numerous amounts of financial obligations. Although, it’s vital to pay all your bills on time, designing your future can’t invariably take the rear seat. If you are having difficulties in finding ways to pay yourself first, strive to take these steps to push you into the habit:
#2. Set an amount and stick to it – Decide how much per pay check you move into a savings account.
#3. Set up a savings account with a decent interest rate – Robinhood offers a 3.00% APY. May not sound like much however, $5,000 in savings would be $152 a year.
#4. Automate the savings - The money entering your account can simply be the cash for bill paying and spending. You won’t need to worry about the temptation to spend the funds you ought to be saving.
#5. Adjust as needed – Understand your limits and shoot for at least 15%.
I automate paying myself first and, I manually pay my bills (besides mortgage). This allows me not to worry about saving, tucking away money and, with tools like M1 or Wealthfront I don’t need to even worry about picking my investments. This enables me to pay attention to those hidden fees in my bills or creeping cost on the rise, this can also be centralized with tools like Personal capital.
My real use case, I noticed that my electric bill was rising and varied month over month. Again, I wouldn’t have noticed if Personal Capital didn’t make it easy for me to see my M/M cost. I inquired further, I noticed that my electric company added a “residential service maintenance fee”. It was a 7.99 fee, seems small but… every cent matters and compounds over the year. After speaking with the representative, they removed the fee. Additionally, I invested in LED light bulbs. Now the whole house is LED powered and my electric bill has never been lower. It’s not easy, especially if you are living paycheck-to paycheck. The key is to get in the habit of putting some money aside towards a savings goal. The key is to turn saving into a habit. After a while, there will be a great sense of security in knowing that you are in control of money and, you have a pile of cash that belongs to you and you alone. This will undoubtedly bring a surge of energy for you. From here, you will want to put away even more. Final thoughts, there is only upside for deferring gratification either; you come to realize you are final keeping some of your hard-earned income and or, you have the money to be prepared for an emergency.
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