Pay Yourself First!
Have you ever felt that you just never have enough money? That no matter how much you work you feel as if you are just living paycheck to paycheck? No matter how much you plan and plan the money just seems to vanish through your fingers? Same! I know I’ve been there. MORE than once, so don’t feel ashamed. In fact up till not long ago I was right there. But here is the secret, which isn’t really a secret. Money attracts money. And do you know how this happens?! By paying yourself first! Ok, so what does this even mean exactly? Well it means that when you get your paycheck; you don’t rush to pay la vecina (the neighbor)what you owe, you don’t pay off your credit cards, rent, or even go play loteria (lottery) to make more money. No, none of this!
Paying yourself is taking a portion of your money, preferably a minimum of a 10% of your take home monthly pay and saving it! That’s right, go ahead and send this money to a savings account. My recommendation would be to open a high yield savings account with an online bank. This way your savings is separate from your checking account and not easily transferable. For many years I made the mistake of having our savings account with our checking account through the same bank. I wanted us to start saving but as soon as I saw a low balance in our checking account, I would instantly transfer the money from our savings to our checking account. So our savings just never grew! I know, SAD! But that’s why I want you to be smarter than me! Do your research on a high yield savings account and go ahead and open one up. If you need recommendations, I suggest looking up Ramit Sethis Savings Account recommendations, he is a financial expert who has greatly helped me in my own financial journey!
So now that you have opened your high yield savings account, now what right? How will we even benefit from this? Well, this is where what I mentioned earlier comes into play. Remember, money attracts money. By saving money, you are paying yourself first! YOU are telling YOU, I am worth it! I deserve more in life! You are preparing yourself for when life happens, you are not caught off guard! Now that you’ve paid yourself first, priority #1, you now get to pay your necessities. This is your second priority, paying your rent, bills, groceries, this is also were you finally get to pay la vecina back, or any credit card debt/loans you have. Third priority, you now get to spend any money you have left over. You finally get to play loteria, or go to spend your remaining money at the swapmeet. And guess what you will feel? A sense of relief, that you have money in your savings that will continue to grow and grow every month. You won’t feel guilty about having taken your kids out for a simple burger or that you bought yourself a little treat. You see, what we all typically do is pay our rent and bills first, then we go out and buy ourselves and our kids a little something. Then we think about saving whatever we have leftover, which typically isn’t much or sometimes nothing at all. When in reality we should start in reverse. With just this one small tweak, your finances can change drastically.
Trust me when I tell you that it feels amazing to see your savings fund grow and grow. I also recommend that you specifically name your savings. Such as; emergency fund, Disney Cruise 2032, car maintenance, gifts and special occasions, or Christmas. The more you prepare for upcoming things that are pretty much predictable the better off you’ll be! For anything else that you can’t predict, well that is what your emergency fund is for. So start by calculating your monthly take home pay, once you figure that out, google what is 10% of (your total take home pay/after taxes). When you get the answer, this is your target goal! Depending on how you get paid, you can calculate how much that will be per check that you send to your savings so that at the end of the month you have achieved your goal. There you have it! This is what it means to pay yourself first, this is breaking free of that cycle that makes us believe we never have enough or that something always comes up. It won't always be easy, perhaps no walk in the park, but it is also not impossible and if you want a better life for yourself and your kids, trust me, you can do it! If you would like to take it even a step further, I would suggest taking another 10% of your take home pay and redirect that money to your investments. For additional information on this, check out this past post! - INVEST Now! Even if You Have Debt — Misfit Hippos
https://www.misfithippos.com/blog-1/invest-now-even-if-you-have-debt
