Pay Yourself First
The concept of "paying yourself first" is a cornerstone of financial planning. It's about setting up systems to automatically funnel money towards your financial goals.
Making It Real with Examples
For instance, I prioritize bi-weekly contributions to my retirement account, treating them as untouchable funds. By contributing from my paycheck, I never see the money in my checking account, eliminating the temptation to spend it.
Similarly, I have a dedicated travel savings account with automatic deposits. This earmarked fund ensures my family’s travel stays on track.
Paying Yourself First: Beyond Traditional Savings
The beauty of this strategy is that it applies beyond saving for future expenses.
Mortgage payments contribute to your long-term goal of homeownership.
Prioritizing high-interest debt payments frees up future income for you to pursue other financial objectives.
Paying Yourself First Isn't Deprivation
It's about intentional spending. If dining out is a priority for you, factor it into your budget. But if you're noticing a lot of spending on what you consider optional, paying yourself first ensures you meet your financial goals before those extras.
By starting small and automating wherever possible, you can pay yourself first and put your financial dreams on autopilot.
Let's Talk Money!
Which financial goals are you prioritizing with a pay-yourself-first approach?
Identify a financial goal where you haven't automated savings yet. What small step can you take today to get started?
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Disclaimer: This blog provides general financial information only, not professional financial advice. You are solely responsible for any decisions you make based on this info. Conduct your own research and consult with a qualified professional before making any financial decisions.