One of the most common questions I get from friends and customers is “How can I pay myself first?” We’ve heard all the reasons why it’s important, yet it seems to be such a big obstacle for most of us. We put it off and hope some day we’ll figure it out. Well today’s your day!
Here are two quick ways to get started building the habit of systematically putting funds in your savings before you can spend it.
Step 1: Deduct your savings before you get paid
If you work for an employer and have direct-deposit, you can request your HR specialist to split your deposit between two different accounts. For example, you can have 10% automatically deposited to a savings account and the rest to your primary checking account. If you receive a paper check or funds loaded on a debit card, ask your bank to deposit 10% into your savings and the rest into your checking account. Set it up and forget about it!
Step 2: Roll it up
Another opportunity to fund your savings is right after you pay off a bill. Since you are already used to transferring those funds out each month, keep it up. Instead of paying someone else, begin transferring that payment into your savings account. Every time you pay something off, like a new phone or a car payment, celebrate by moving that cash flow right over to your savings account. Keep rolling it up!