Want Financial Freedom? PAY YOURSELF FIRST!

In my quest for financial security, I learnt this at an early stage of my work life that I need to pay myself first before paying bills. This has worked for me a great deal. I don't negotiate it. It is a priority for me. Kudos to my Dad who taught me when I was growing up that I shouldn't eat up all that I earn.

 I have consistently done this for years. You can't do this and be broke.

I believe this is one of the reasons why most people struggle with their finances by not paying themselves first. How can you work or have a business and not set aside some certain amount for the future.

 If you have tried to pay yourself when planning your finances and you discovered that it has been a struggle, it might be that you settle yourself last after expending on so many other things like rent, vehicle maintenance, groceries, eating out, movies etc

When you pay all other expenses first before you pay yourself, usually you discover there is no money left over for you. That is why people live from pay check to pay check. Eating their future in the present.

Here is an essential tool that will work for you: PAY YOURSELF FIRST. This is one of the most powerful financial habits of wealthy people. This is the first pillar of money management. Some financial experts will tell you to set aside at least 10% of your income. Successful savers have known this secret works and it is as simple like A,B,C.

You must put aside a certain % as savings away from all the income you receive before you pay bills or make loan payments. Whether you are a salary earner or a business person, honour and value yourself and set aside a certain % as savings. You may do more than 10% depending on the money that comes in.

Some of the excuses we give is because we think what we earn is small and so we don't bother to pay ourselves. Even those in business excuse themselves that they are just starting out, pay yourself from the profit that comes in from your business. If you keep making excuses, you won't even start at all.

If you don't start when you earn little you won't start when you earn much. You also need to know that you can't work all your life. There will come a time when you can no longer work. How will you fund your life?

HOW TO PAY YOURSELF FIRST:

1. Ensure you include savings as a fixed expense in your budget and fix an amount for it.

2. Create an account that is separate from your other accounts and Save what you pay yourself.

3. As soon as you receive your pay or when money is available, set aside a certain percentage (Do whatever works for you) or pay a fixed amount into this account.
 Ensure you do this before spending on anything else. You can set aside an automatic recurring transfer on your checking account to transfer the amount to your savings on a particular date. This will spare you from the temptation of spending it as soon as your pay check comes.

4. Once your savings is set aside, you can then expend on your fixed bills and spend the remaining on other discretionary expenses.

5. The money you have set aside in your savings account must be accumulated and invested. With the law of compounding, you wouldn't know what your funds can achieve.

Do not eat your future now. Start today and be consistent at it.

Save Wisely!