Do you have a difficult time-saving money? Just when you think you’re doing good something unexpected comes up and POW!! Savings gone. This is a reality for so many people. More and more people are living paycheque to paycheque and it is steadily becoming the norm in society.
How is it that you can go to work every day and work hard just to end up with little or nothing come the end of the week? Where did it all go? There will always be something that needs to get paid for or purchased.
Lots of people would have you make a budget and follow it to the letter. “This is the best way, the easiest way” they would say. Well, I don’t think it is. Besides, how many times have you read something about creating a budget and following it to “get out of debt” or “make your life easier”?
In the end, most people who try and stick to a budget only follow it for a short period. It ends up being more like January and February at the gym. Everyone piles in to make “the new me” and “I’m going to get into shape this year.”
Similarly, budgets tend to work the same way. Lots of people try and it ends up being restrictive and time-consuming, not to mention the anxiety that can come with only having “x” dollars for this or that.
There are more ways to save money without budgeting, ways that will become easier and easier once you start. (A lot of these you don’t have to do anything) The key and the hardest part is to start doing something about it right now. Not tomorrow. Right now!
This isn’t about leaving yourself short on bills or not being able to get those Cocopuffs you like. This is about Paying Yourself First! After all, you worked hard all week, why shouldn’t you get a piece of the pie.
Who are you working for?
Think about this, truly think about it. Who are you working for?
It seems like a simple enough question. The answers are obvious. You work for YOU, right? But do you actually work for you? You go to work to earn a paycheque just like everyone else. That’s how you get YOUR house YOUR clothes YOUR food right? But you aren’t working for you.
You get your paycheque and pay your Mortgage or Rent, pay for the Groceries, Schooling, Credit Cards the list goes on and on. If you are working for you why are you giving all of your money away? I thought it was yours.
Something I’ve noticed in my own life and I have paid attention to the people around me as well is, no matter how much money people make, we adjust our expenses to reflect that amount.
What I mean by this is if you take home $500 a week and all of a sudden you get a raise at work and you are making $1000 a week. People without even thinking about it adjust their life to fit into $1000 a week.
I’m guilty of this absolutely, so many others as well. The opportunity in getting a raise can go so much farther than just getting the newest phone because “I make more money now.” It can truly become YOUR MONEY!
Stop Giving Your Money Away
Stop giving all your money away and start using your money for what you want. Now, this doesn’t mean go crazy and buy a Ferrari. But it can mean in time you get to do more than stress about how much money you have. You can have the money to do what YOU want, have what YOU want.
Do you want that trip in August? The new shiny car? Build a new kitchen? The possibilities are endless!
It all starts and ends with money though, right? It’s all cool and fun to say “yeah, I’m going to renovate my kitchen. I’m getting oak cabinets with hand-carved crown molding, granite countertops, and stainless everything.” But in reality that’s a luxury few can just “afford.”
Do you see that happening right now? It would feel pretty awesome though, wouldn’t it? To have the best kitchen, the nicest car, there’s something we all want, it may not be a new kitchen but there needs to be a strategy in place to be able to achieve it.
Start Paying Yourself and STOP Paying For Everyone Else
What is it though? How is this Paying Yourself First thing going to benefit you? You are the one who needs it but what is it?
Paying Yourself First is just that. Paying You! You work every day and should be able to enjoy your own money. Don’t let life put you down and make it so you can’t enjoy yourself. You deserve to have some of your paycheques too.
To start Paying Yourself First, you need to start small and properly set goals. If you are tight on your money right now it is important to ease into paying yourself. You don’t want to just forget about the bills and necessary expenses that you have. But do you remember how I said people adjust their lives according to their income?
If they get a raise they spend more money. If they start a side job they spend that too. The vicious cycle of make and spend goes around and around but there’s a secret that you need to know!
It works when your income goes down too!
People whose income goes down a little bit at a time find a way to adjust their life in accordance with how much money they make still. With that little bit of knowledge, you can start paying yourself today!
You will find over time that you will be able to Pay Yourself more and more. This isn’t a race it’s a marathon. Be the one at the end holding the trophy!
Do you have a savings account? I hope so, you need one if you don’t have one already. It’s super easy to get one and it rarely costs you anything. Pretty well all Banks or Financial Institutions offer saving accounts.
The great thing about them is that they pay a little bit more interest and allow you to separate what you pay yourself from what you need for your bills.
Let’s break down exactly what it means to Pay Yourself First. I’m not talking about the money you put into investments. But you CAN use this money for that and you should definitely look into compound investing if that’s your plan.
I’m talking about the money you get to use for you, the things you want. So if you are already putting away some of your money into investments. Don’t stop doing that just to start doing this. This is going to be the icing on the cake. The sugar in the coffee.
How to Pay Yourself First
Seeing as you have a saving account already it’s really simple to pay yourself. Remember to start small even if it’s only $20. Just go to your bank or online banking and set up an automatic transfer from the account where your paycheque goes in and send it to your savings account. That simple!
Set this up for the day you get paid. If you get paid on Fridays, set it up for Friday, Thursday? Set it up for Thursday. The point is you get paid FIRST, before ANYONE else.
Remember I said you don’t have to do anything? 2 minutes of work in setting up an automatic transfer and bang you’re getting paid!
Do you want to take it one step further? There are other ways you can save money while doing nothing.
One way to save money that I use and trust is Mylo.
Mylo is a Canadian roundup app that always you to save money in the background. You link Mylo to your bank account and the app will round up all of your purchases to the nearest dollar amount. So if you buy a candy bar for $1.25, Mylo will round that number up to $2 taking the $0.75 and transferring it into your Mylo account.
$0.75 may not sound like much but when you are using your bank account all the time like most of us, a few pennies here and there adds up to thousands of dollars after a short period of time. Using Mylo I have been able to generate over $1000 in savings while doing nothing. Mylo is a set it and forget it investing tool that is great for anyone looking to save a little rainy day money.
The Emergency Fund
Having an Emergency Fund is an extremely good idea. The emergency fund that you will be creating through paying yourself first will be one of the most important parts of your financial success. An Emergency fund is saving that will allow you to manage unforeseen events. That is when something unexpected comes up you will be able to pull from your emergency fund and get it taken care of.
Have you ever had something unexpected come up and you panicked a little bit? “How am I going to pay for this? I can’t believe this happened” having an amount of money saved up for Emergencies like getting laid off if your job slowed down and the work wasn’t there. The car broke down and now not only does it need to be towed but there’s an $800 repair bill that needs to be paid to get it fixed.
Struggling to get through these events and inevitably putting the expense on a credit card hinders you from coming out on top of a bad situation. By simply setting aside a few dollars every pay or utilizing apps such as Mylo you can use that money in the event of an Emergency.
Many experts suggest that most people should have at least three months of salary saved up in an emergency account in the event they lose their job or get laid off.
A lot of times these situations land you in debt. If that’s happened to you don’t worry you can check out the fastest way out of debt while investing at the same time!
Having an emergency fund will protect you from missing payments until you can secure future employment. If you think about having this money as an insurance policy similar to the insurance policy you have on your vehicle, in the event of a crash or accident you are covered.
Here you won’t be paying the insurance premiums you will be reaping the benefit of being covered just by having some money set aside.
People who have money set aside in a saving account or some other form of savings tend to have fewer Emergencies happen. This is because as something comes up that could have been an emergency without the proper funds to take care of it, it gets dealt with smoothly and you move on to the next thing.
When your only option is to borrow money or credit your problems add up over time and all of the problems from last year you are still paying for this year. That’s not a fun game to play and it’s a game easily avoided by Paying yourself first.
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