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!