FMOOD 0257: Pay Yourself First
It's advice that you hear in various forums: pay yourself first. But when is this an appropriate strategy? What if you're just making ends meet, living paycheck to paycheck? How would you go about saving up some money by paying yourself first? First of all, this is a decision that you have to make for yourself based on your particular circumstances. If you are barely able to get through a month without running out of money, now may not be the time to start saving money by paying yourself first. With that said, you should still keep this in the back of your mind as a someday goal, because I really do think that paying yourself first is a great idea. Most resources that mention paying yourself first recommend 10% of your take-home pay. It's also recommended to set this amount to be placed into a savings account at a separate financial institution from where your checking account is located automatically, usually through direct deposit. If 10% is too much of a challenge, it may still be a good idea and a benefit for you to start smaller, perhaps saving 3% or 4% of your take-home pay. What you're essentially doing is setting yourself up with a good habit that will take you far, especially when you get to the point where you are focusing your goals on getting into prosperity. You need to recognize that the end game in all of this is to have your money work for you and not the other way around. It's easy to support this show. If you are looking for some great bargains and like to shop online, check out http://followmeoutofdebt.com/deals. When you purchase something using that link, even if it's a gift for someone else, you'll be helping to contribute a small amount to keep this show of ours going. Your help is truly appreciated; thank you.