How To Save Money By Paying Yourself First
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Do you have a family? If so, then it’s even harder to save money at that point. If you don’t yet have your own family, then take this time to make a declaration: I am going to sacrifice to save no matter what it takes. You want to provide for your family later on, and well, it helps to have a nest egg when you get started.
It does seem like, however, that the more you do and the more you build, the more you have to pay. As Dave Ramsey always says though, it’s time to pay yourself first. Paying yourself first forces you to save ahead of doing anything else. Those bills are always going to need to be paid.
Granted, in order to save money, you have to be operating on a budget that makes sense. You can force yourself to save, but if you’re spending more than you’re making, well, that’s not going to work out, is it? And when it comes to spending, it’s not just about ‘stuff.’ It’s about your bills.
What does your budget look like? Your income has to first clear all your bills. Second, you have to curb spending on food, clothes, entertainment, etc. so that there is enough room left in your budget to save money. Then you can institute that pay yourself first rule I was just talking about.
Once you get to that point, it’s still not going to be easy. Yet one way you can make it easier is to find ways to save automatically. I use a save your spare change app, and I put money in other accounts, too. Set up automatic transfers to your savings account, and build up that emergency fund.
If you are using a regular brick and mortar bank, you are likely not getting anything in terms of interest on what you save. That’s okay at the moment because you need a liquid emergency fund. Yet there are so many innovative online banks and banking apps that can help you actually make money with that money.
That doesn’t mean that you need to necessarily tie your emergency fund up in investments or CDs. In fact, that isn’t suggested at all. But you do want to make your money grow, and you do want to save money. You need to put the money you save to work for you, too.
The times are changing, and there are so many options out there these days. I suggest saving any way that works for you, but you have to make it happen. If you don’t save money, you’re just going to be finding ways to spend it all over again. Whether you put a bill or short-term goal ahead of actually saving, or you just spend it on entertainment, that money is going to get spent.
That’s why it’s so important to reign in your budget and get a strong savings behind you. You will have emergency cash when necessary, and you can simultaneously work towards becoming debt free. Then it’s time to build wealth. But you’re never going to get there if you don’t find a way to save that first couple of grand. It’s just that simple, and you have to do it while taking care of your personal financial picture.