Whenever your paycheck hits your bank account, do you dance for joy or do you automatically think about all the bills you now have to pay? If you are the latter, I now want you to include yourself as an expense. Just like the other non-negotiable expenses you have to take care of, you must pay yourself as a priority. No one else’s finances are more important than yours.
Paying yourself first means creating and growing your savings account. This could be in the form of an automatic transfer from your checking to savings account, and/or contributing to your company’s retirement plan. Just like paying your cellphone carrier every month, you would pay yourself a set target every month or every paycheck. It is recommended that you designate a fixed percentage of your pay towards savings and retirement, so that as your paycheck grows so does your savings. 10% should be the minimum. If you make $1,000 per paycheck you set aside $100.
This habit of paying yourself first is building towards your future. You are building a safety net for emergencies, a plan for retirement. Not only that, you are building discipline. You are consistently and intentionally taking an action that will benefit you today and in the future. You are strengthening your habits and growing your wallet.
MMM tip: If you do not have one set already, commit the percentage you will save from each paycheck.
Until next week,
Dariene
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Disclaimer: This newsletter is for informational and educational purposes only and should not be considered financial, investment, tax, or legal advice. I am not a licensed financial advisor. Please consult a qualified professional before making any financial decisions.
