Simplicity

Simple Money project #2: Pay yourself first

As we have become more purposeful with our money, one of the strategies that we have found particularly helpful is to pay ourselves first. When we first started being intentional and trying to save, we aimed to save any money that was left over at the end of the month but there was rarely any money available. This approach also explains why I could never manage to pay off my overdraft – I would tell myself that any money left over at the end of the month would go towards the overdraft, but by the time the end of the month rolled around everything had been spent.

Once we adopted a new system and started to transfer a set amount every payday to our savings account it had a very significant and immediate effect on our finances. We have worked up to transferring 20% on average of our income most months and we put this in our different savings accounts to work towards medium and long term goals as soon as we get paid. Essentially we are paying ourselves, before we do anything else with our income.

This week in the Simple Money Project I want you to encourage you to set the intention to pay yourself first. As soon as your income for the month hits your account, move a pre-determined percentage of it and direct it with purpose. If your goal is to pay off debt then allocate the money towards that.  If you have no debt and are trying to build up your savings, steer money into your savings account before you have time to spend it! Start with what seems like a realistic percentage of your income to pay yourself with and build up from there remembering that every little amount that you allocate purposefully, will help you make progress towards your financial goals!

IMG_2854-0

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.