Pay Yourself FIRST!

If you're like me there are many things out there to spend your money on and you never seem to have enough money.  If you're like most people you save whatever you have left AFTER you pay off all your bills and get those things you need / want.  This means most people save nothing.

For the first time since the Great Depression in 2005 the average American spent more than he/she earned.

Personal Savings in Billions of Dollars

This staggering number shows the trends on acting like Mom and Dad.  If you go back to your parents right now and asked them what kind of things they had at your age, you will usually find they had far less than you do now.  They achieved their wealth today because they SAVED yesterday.

TIME POWER OF MONEY The time power of money shows us exactly why we have to save.  $1000 today is $10,000 30 years from now at 8% rate of return.  If you put away $3000 a year for the next 30 years your $90k contribution will become $370k.  All you have to do is put the money away.  If you put away $0 today, you will have $0 30 years from now.

TAKE THE PRESSURE OF BUDGETING OFF YOURSELF Most people spend what they have and spend accordingly.

  1. Never spend more money than you have!  If you cannot pay off your credit cards at the end of the month you are spending too much.  Whenever you make a purchase decide if you need it and if there is a cheaper alternative.

  2. Have your money withdrawn from your paycheck so you're never tempted to spend it

  3. If you think you can't live without some money, try to put 1% away and see if you can still live.  Most people will adjust their lifestyle to the money in their checking accounts.  If you put your money out of sight and think you have $2000 to spend per month instead of $3000 you will make simple adjustments like eating in more than eating out, finding cheaper forms of entertainment, laying off some big, unecessary (albiet nice) purchases.

These three little things give you an almost automatic budget without any of the work of keeping a budget.  I would still recommend a budget of course, but by hiding money from yourself, you will automatically keep yourself from spending it.  Try taking this to the extreme and see just how great a percentage of your income you can sock away so that you can live like your parents sooner and without going in to debt.