Once I became an adult (some may still question this status), and got a job working dial-up support for a local internet provider, starting off what would become my career in the technology world, my Dad told me a good bit of advice…
“Pay yourself first.”
Before you pay your rent or mortgage. Before you pay your car payment. Before you pay your credit card(s). Before any money leaves your hands (or checking account). Pay yourself first. Take a little, or as much as you can stomach, and put that money away. Put it into your savings account, or better yet – someplace where you cannot easily get at the money. Because if its easy to get at, its easy to spend it. You might say to yourself “oh, I’ll put it back as soon as I get paid again” … that is a bad cycle to get into. Even if your money isn’t earning a cent in interest. Pay yourself first.
I had lost sight of this a few years later, when my financial downward-spiral started, using credit cards like they were my savings… when until I could barely make the minimum payments to those, every cent mattered, and I could not pay myself first. I never forgot this bit of advice, and never will, and to my kids, even though they are young, I pass along this bit of advice to them when Sunday night comes around and we are tallying up chores for allowances, so they can also adhere themselves to this great piece of advice.
I couple of years ago, I started doing that. I am not independently wealthy, I am just re-starting the path toward having something resembling a “nest egg”. But I am now living this mantra.
As soon as my paycheck comes (after of course putting some of my pre-tax income into my 401k), I have an automatic transfer setup at my bank to do just that. It transfers a pre-determined amount (it can be $10, it can be $100, it can be more or less – whatever works for you) from my checking to my savings. In fact, I do that every Friday morning, even on the weeks in-between getting paid. So no matter what, I am putting at money away every month into my Money Market Savings account (more on these in a future post), and do not touch it.
I also have other savings happening all the time as well… paying myself first, such as Acorns (as previously mentioned), and other services which I will get into in future posts.
So, before you pay that bill when you get your paycheck… follow my Dad’s advice. “Pay yourself first.”