Do You Pay Yourself?

Do You Pay Yourself

Do you worry about money, investment, loans, health, or family and are not being able to take care of yourself, the first rule is to take care of everything to stay healthy and Pay Yourself first. Make sure you save some money for yourself before attacking your bills.

Pay Yourself First

Every working person’s typical scenario is that you get your paycheck. After you recover from the shock at how little is left after taxes, you move to spend and expense management platform it up among all your outstanding bills, intending to put whatever is leftover into your savings.

But there never appears to be anything leftover and your savings don’t grow.

A more suitable plan would be to pay yourself first. Don’t let the money (your earnings) get into your hands. You might find that you really begin to grow your savings much quicker in this manner.

If you work for an employer with an Individual retirement account (IRA) plan, the first thing you should do is to fund it to the max. If you can’t afford that, at least put sufficiently in to get the full matching contribution from your employer.

This IRA investment is made before taxes. Your investment is larger and with the employers, contribution grows fast.

Next, have a brokerage or mutual fund company debit your banking account monthly automatically. This money should first go into an Individual retirement account (IRA) – if you have five years or more additional to go to retirement, make it a Roth IRA.

Next, have some periodic dollars more be debited to go into a no-load, low-cost mutual fund. The younger you are, the more aggressive your selection of the fund can be.

After that is done, then figure out how to pay your bills and living expenditures. If money is tight, cut back on your living expenditures and use the extra money to pay down your debt.

Start with the lower balance first. Once that debt is paid, take the amount of money you were paying on that debt and count it to the payment on the next lowest balance debt. Continue doing this and you can be completely debt-free within 5 to 7 years. 

Another version of this procedure is paying the highest interest rate debt first. The principal is identical, you just see more progress with the first approach, although it could be more costly based on how your debt is spread.

If you don’t believe in this approach, fetch the premier version of Microsoft Money or Quicken and utilise the “Debt Reduction” module. You will be shocked at how much money you will save and how fast you can eliminate debt through this method.

The idea is to scrimp at the expenditure of your current lifestyle while leaving your savings to grow and your debt to shrink.

I know many of the individuals reading this will scream that this is an impossible plan. But it is completely doable with a little willpower and the ability to delay gratification for a while.

The difficulty is that if you don’t do this, your future might turn out to be very unfortunate. So, don’t wait for a miracle, start working with passion, manage your debt, and investment and start to Pay Yourself first. 

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