Are You Still Paying Yourself Last?

Paying yourself first has long been a strategy to increase savings and build a foundation for a secure financial future.  Even in the best of times, paying yourself first is often difficult for individuals living pay check-to-pay check.  It is not hard to understand why many people have found this increasing difficult to implement in the past year or so when paying day-to-day expenses has become more difficult for more Americans.  Unfortunately without making paying yourself first (or at all) a priority, many of these people will never achieve their financial goals.  If you think it can’t be done due to limited resources the following tips can help you find extra money in your budget to begin saving for your future needs.

  • When it comes to real estate you often hear location, location, location.  In the world of personal finance the key word is automate, automate, automate.  That is right, if you simply establish an amount that you can reasonably put aside each week or pay period, and have it automatically transferred into a savings account you will probably never miss the money.  Even as little as ten dollars per transaction will begin to grow and build a foundation for future savings and growth.
  • Participate in employee sponsored retirement accounts.  If your employer offers a 401(k) or other retirement program you would be foolish to not participate.  This is especially true if your employer is willing to match contributions you make.  These types of programs literally offer the closest thing to free money that you will find.  Make sure when setting up your account that you select an amount that you can afford to contribute.  Obviously the more money you invest the better the opportunity for growth, however it is important to make sure you are not socking away money that you could be using to pay down high interest debt or other expenses. Carefully review your budget to determine a contribution amount that will fit in with your household budget.
  • Keep paying your debt after it is paid off.  That’s right, whatever amount you were paying toward credit cards or other debt should be moved to your savings account once the debt is paid off.  You already are accustomed to not having that money as “disposable” cash so moving it to your savings account before it becomes absorbed in your daily spending will guarantee future savings.
  • Bank extra money.  There are so many ways to save money.  As more people jump on the “spending less” bandwagon, you may find yourself cutting coupons or eliminating unnecessary spending.  All of this “extra” money should go directly in a savings or investment account.  Do the same thing with raises, bonuses, refunds or extra pay checks and watch your savings grow!
  • Put yourself on the list of people to be paid.  Simply changing your mindset about saving money can make it easier to begin making sure you get paid.  Consider yourself as another bill or financial obligation and determine an amount you have to be paid out of each check.  Then when your pay check hits your bank, pay yourself just like you would the cable company or your mortgage note.

These are just a few of the things you can do that will help you find extra money each day to fund your savings.  Most people who think they cannot pay themselves first are surprised at the many ways they can funnel their money into accounts for better use.  Get started today to reach your financial goals.

Trisha Wagner is a freelance writer for, where you can compare rates of checking accounts from dozens of banks in one place. Trisha writes regularly on the topics of personal finance and savings accounts.

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