Tuesday, September 20, 2011
Pay youself first
First put money into savings . If all your money goes into checking at the start of the month, there is never anything left over at the end of the month. I had this problem recently when I started renting my house. I kept putting my cut into checking and always ended up broke. When I set aside the rent money into savings at the beginning of the month. Things changed. I really started to save. Sometimes I dip in and take twenty or thirty dollars, but for the most part I don't touch the savings at all. Paying myself first has lifted my savings considerably. In the past my bank would also take a certan amount each week out of my checking and put it into my savings account automatically. It was amazing how quickly and painlessly my savings grew. Many banks offer this service. Take advantage of it to kick start savings. Small amounts grow big in no time. Not having the money available makes it hard to spend and this leads to saving. We could all use a little help with discipline. This makes it automatic and easy to do. In fact any automatic savings plan is good. Take advantage of this at work. Any plan that takes a portion of your salary and invests it is good. If the plan also matches your contribution in any way, that is even better because it's free money. This is how people get rich. Live with less and save more.