7 Steps to Pay Yourself First The Secret to Financial Wealth

Ever had the experience of promising yourself to set aside a small amount of savings on your next month’s paycheck, only to find out that you haven’t done it again after a month? You realize that you have been putting off the plan to save month after month and it has become a vicious cycle. The reason is that, oftentimes, there wouldn’t be enough left from your paycheck after paying the monthly expenses such as rent or mortgage, utilities, groceries, phone subscriptions, cable, etc.
Want to know the secret of saving and investing more? Pay yourself first before anybody or anything else. It’s proven to be very effective! This strategy means that you set aside part of your income the day you receive it before paying your regular monthly bills or spending it on anything else. Do the opposite instead. Treat it as your priority. Let it develop into a monthly habit of yours until you retire from work.
Resolve to do it on your next paycheck. Ideally, 10% of your monthly income is best to put into an account dedicated to savings. It may be difficult to adjust your financial habits at first, but once you make use of your tremendous determination and willpower, you will end up a millionaire when you start early in your 20s until your retirement. Always make that the first bill you pay each month is yourself.
Here are effective ways on how to develop the habit of paying yourself first:
Set up a personal goal so that you will have a clear idea of how much money you are aiming for. Let’s say, you promise to set aside 10% of your monthly income, stick to that promise until such time you have hit your goal.
Review your current monthly expenses and determine where your money is actually going. Figure out which of your expenses can be reduced or removed from your budgets such as cable subscriptions or your monthly gym memberships so that you can have more money to save and invest.
Open an account, preferably with high interest-yielding rates. Treat this account is separate from your other accounts that will be solely dedicated to savings and investing.
You can also have your paycheck or income set up on an auto-debit to ensure that a portion of your paycheck goes into the account automatically.
Never touch your savings for other purposes. Don’t ever pull your money out of your savings account for some other reason that is not related to your goal.
If you don’t have enough to meet your monthly bills, find other ways to generate more income such as a side job or business. Try to be creative in solving your day-to-day expenses. Be frugal and don’t waste money on unnecessary things. You can cut down on your expenses, too.
Mentally establish a mindset that savings are more of a priority than paying your other bills. Treat it as part of your budget and a financial obligation.
Happy Paying!