What’s the first bill you pay every month? Is it your rent or mortgage? Perhaps it’s your cable or telephone.
If you want to be smart with your money, they very first bill you should pay is to yourself. Yes, even if you are in debt. Even if you are just barely making ends meet. You NEED to pay yourself, before you pay anyone else.
Why is it so important to pay yourself first?
That’s easy – to protect yourself. You need to put some money away for your future… or your future won’t be very bright.
I know that I want to retire when I have a bunch of money stashed away – enough that I could live on until the day I die (and then some… just in case).
When times are tough (and trust me, I know what that is like), it can be difficult to even think about saving money for your future.
Many people believe that paying off debt is more important than saving for retirement – and while I agree that it is very important to live a debt-free life, I also strongly believe in saving for your future. No one else is going to save for you, so you have to do it yourself. If you are in debt, I would suggest putting more money toward debt than savings. Once your debt is paid off, you can then ramp up your savings.
Don’t put off saving for retirement.
The earlier you start to save money, the easier it will be for you to get into the habit of paying yourself first.
You need to pay yourself before you pay any other bills. This includes groceries, utility bills, car insurance. Everything. You and your family are more important than your landlord. More important than the cable company. Pay YOURSELF before anyone else gets a single cent of your money.
The following are some easy ways to pay yourself first, without much effort.
– Automatic Withdrawal. Have your bank set up an automatic withdrawal so that every month (or week) you will have a certain amount of cash sent from your chequing account to a savings account of your choice.
– Paycheque Deduction. Many employers will allow you to set up a form of paycheque deduction, where a portion of your paycheck will go directly into your savings account. This is a great way to save, because you never even see the money hit your chequing account (so you don’t have to worry about spending it!).
If you haven’t already started paying yourself first, start now. Even something as little as $5 a week will add up to $240 by the end of the year.
Remember that you are the most important thing. Give yourself the best future possible by paying yourself first.