Paying Yourself
One of the best ways to save money is to pay your self.
Every time you get a paycheck, “lose” a little to a savings account. It’s gone. Do that before you pay the bills because if you think of savings as what’s left over, you’ll never save. Most people don’t have money left over. There are plenty of places it can go before it lands in the savings account unless you bypass the financial back roads and send it on the superhighway to savings. Most banks will do this for you automatically, which means you don’t even have to make a decision to save; the money just goes out of your account.
There’s another way you can pay yourself, and that is to make smarter financial choices and pay yourself the difference.
If you decide to quit smoking, pay yourself what you normally paid every time you bought cigarettes. If you normally have pizza delivered and instead you buy a pizza at the grocery, pay yourself the difference. Don’t forget that tip! If trips to the grocery store are usually random collections of impulse buys and you decide to stick to a grocery list you made at home where you weren’t around tempting displays, pay yourself the difference.
Suppose you had to cut back because in your previous life these things were bankrupting you. So you cannot afford to pay for the pizza delivery, for the two packs of cigarettes a day, for the latest soft drink advertised on television and you gave these things up. Pay yourself half of what you saved or even a quarter of what you saved.
When you pay yourself this way, you’ll be surprised to find out how quickly the money adds up. As the money adds up, you’ll find yourself more motivated to keep making sensible choices.
Finally, don’t stick all of it in a savings account. Are you surprised? Choose a small percentage of it that will allow you to do something fun and give that to yourself. Having a small reward, bought with your “allowance,” will help with your motivation to stick with the program even when the decisions get tough.
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