Pay Yourself First
One of the best strategies to save money is to pay yourself first. This simply means that you should decide to keep aside some amount of your salary as ‘YOUR PAY’. You should compulsorily pay that money to yourself before you pay off any of your bills or debts. This amount can be anything of your choice – but ensure it is a fixed amount every month.
What is important is that you save some money first, instead of doing it last. Most people pay off all their bills first and then think of saving anything that something that is left over. But it never really works that way. If you wait for the last minute, there will never be anything left with you to save.
If you make it a priority to pay yourself first, then you will definitely be able to save a handsome amount of money from your salary. The good thing about this method is, if you have a tight budget, you are still forced to make adjustments elsewhere, and your savings continue to grow.
Why do you work? To earn money for you and your family. Correct? That’s why you should pay yourself first – to ensure that your priority is taken care of first.
Pay Yourself Automatically
Set up an automatic way of doing this so you never need to think about it again. Set up automatic transfers with your bank – e.g.: Recurring Deposit.
People who use this method feel the pinch in the beginning, but gradually get used to living on a little less amount. When you almost forget about automatic savings and let them grow, amazing things happen – automatically. Saving even say about Rs. 1000/- a month turns into Rs. 12,000/- a year.
Now if someone does this for over a lifetime, just imagine what fantastic results they will get – automatically. Of course, someone can afford to save more once they get their debts paid off. So their final amount can be much higher.
Hopefully, you can see how easy it can be to reap rich rewards with simple small savings, where you simply pay yourself first.
– Muriel Coutinho