Pay Yourself First
Many people, once they receive their paycheck, use that money to pay their bills, payments, and other expenses before they consider saving any money. To pay yourself first means to do the opposite; it means once you receive your paycheck, save money first before you pay any of your expenses.
This can be done in two ways. First, you can choose to set up an auto-transfer. An auto-transfer is when funds are automatically taken out from your checking account and transferred into your savings account. You can choose the amount and how often it is transferred, and once it is set up, you won’t have to think about it after that.
Another way to pay yourself first is to make the transfer yourself each month. Perhaps your weekly or monthly income fluctuates from time-to-time; this allows you to choose the amount you’d like to save each week or each month.
You also have the option to place the portion of your income into different accounts besides a savings account. You can also consider transferring money into retirement accounts such as IRAs and 401k accounts.
Paying yourself first is a great option for those who wish to grow their savings for both short-term and long-term financial goals. Having something saved can also create a peace of mind in case of any emergencies or knowing that you have enough money saved for retirement. Paying yourself first puts you in control of how much is saved each week and each month, and makes saving a priority.