• Saturday, July 13, 2024
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Pay yourself first before others


Attitude to finance makes the different in achieving financial success. While it is advisable that you should pay your debt as quickly as possible, it is most advisable that you also save first. This is what experts describe as paying yourself first. 

For most people, the first thing people do when salary is paid is to rush and pay for all monthly commitments. Whatever cash that’s left would be the money they have left to spend and save for those who have cultivated the attitude.

The suggested method of paying yourself first would be to do it the other way around. Save up a portion of your take home pay, pay your bills and you can spend the remaining on whatever you need. Remember that it is supposed to be in that particular order.

It may not be easy initially because you may be panicking that you may not have enough for bills and other expenses once you’ve taken out a portion of your net pay. Don’t worry, do it slowly if that’s the case. Start off with taking a small amount to be put aside. Once you find that you have excess money for the month, then you can start setting aside more the following month.

Fix a minimum amount to set aside, but not a maximum. Sometimes, when you find out that you have some spare in your bank account; quickly transfer a little into a separate bank account. The reason is because you won’t be tempted to spend more than you should, knowing that you have a little extra. Make a rule not to withdraw cash from that separate bank account you created unless it is for investment purposes.

If you intend to save up some money for personal indulgences like going on a holiday, buying a fancy new laptop, down payment for a second car, etc, saving money this way would also help you achieve your goal faster. You just need to be diligent at making sure you pay yourself first each month no matter what. If you have the use of an internet banking account, use the monthly recurring transfer function to pay yourself a fixed amount. That way, you will never forget about paying yourself first, saves you the stress of going to the banks, and your savings towards your goals will come around sooner than you think.