Family Finances: Remember To Pay Yourself!
Dealing with the family finances is stressful enough, especially if you have debts you are trying to pay off, credit cards to deal with or are determined to start an emergency fund. In the midst of all this you need to remember to pay yourself.
You may have heard of self-employed people giving themselves a paycheck, but you should also do it. Think of yourself as a bill to be paid. Set a certain amount that you will be paid and this will be the start of your savings account.
You may wonder why this is important. Have you ever paid all of the bills and then discovered there was nothing left to put in a savings account? Have you ever created a budget and then realized that you forgot about saving some money? Paying yourself is an easier way to give you a good start to saving money, even if you think you don’t have any extra cash to spare.
Another good thing about paying yourself is you will not be able to have any excuses not to save and it will build up quickly. Even if you can only put a few dollars a month into paying yourself, it is something and something is better than nothing. We live in a chaotic world where anything can happen and a savings account is not a luxury, it is a necessity.
What I like to do is when we get paid, I immediately put the allotted amount in our savings account. We have the amount already put into our budget just like it is another bill. Over time you will see how easy it is to save and you will look forward to watching your nest egg grow.
A savings account is not just for the middle class or the wealthy. No matter what size your paycheck is, it is possible to put some money in an emergency fund. Just think of it this way: If you put $20 a month into the account, then in one year you will have $240. In five years you will have $1200 and the amount just increases from there unless something major happens.
Now just imagine if you are able to put a little more in there and then you add in the interest the bank will deposit in your savings account and you will end up with a nice chunk of change. Don’t forget about the Money Challenge! I’ve been doing this and I consider this as payment to ourselves!
Do you pay yourself like you would pay a bill? Do you have any tips or advice for others on the subject?