Feeling Broke? Pay Yourself First
When I landed my first “real job” after college, I thought the new income would have me driving sports cars, buying designer clothes, and taking lavish vacations in no time.
That’s how all adults live, right?
But a funny thing happened. My paychecks kept rolling in, but my savings account never seemed to grow.
And every year when I got a nice raise and a bonus, I still didn’t have anything to show for it. What was going on?
It turns out that although the company I worked for was paying me, I had failed to pay myself.
When I got my paycheck, I would pay my rent, car loan, credit card, and other bills. Anything that was left over felt like “free money” that I could spend on whatever I wanted: eating out, movies, clothes, gifts, etc.
It’s not that I didn’t think about putting money away for a rainy day. Every month I promised myself I would save some of my earnings, but it would still disappear.
Finally, I decided to pay myself first before I blew through my extra cash. Since I couldn’t trust myself to add money to my savings account, I set up an automatic savings plan through my bank.
Every 2 weeks, my bank automatically took a set amount out of my checking account and deposited it into my savings. I never had to think about doing it myself, and I never missed the money.
My savings was growing steadily without me having to lift a finger.
The best part was that I could spend the extra money I had after paying my bills without feeling guilty about not saving it.
It’s a lesson I’ve applied many times as a life editor—use technology and systems to automate as much as you can. Pay yourself first!
Now that I run my own business, I still pay myself first. I divide my income up into different chunks for taxes, my family’s expenses, savings, business expenses, and “fun money” just for me.
If you’re having trouble growing your savings, create an automatic savings plan for yourself. Take the responsibility off your shoulders and let the system take care of you.
Many banks allow you set up automated savings directly through their websites, and you can choose to save a specific dollar amount or a percentage and decide how often the money should be deposited into your savings account.
It’s such an easy thing to do, and these little edits add up over time for big results.
This post focuses on Step 3 of the Life Editing Process, Add Good Habits and Routines. For more about life editing and what it can do for you, click here.
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