The Money Club for Young Adults
Pay Yourself First
What is 'Pay Yourself First'?
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it means automatically routing your specified savings contribution from each paycheck at the time it is received. Because the savings contributions are automatically routed from each paycheck to your savings account, this process is considered to be paying yourself first; in other words, paying yourself before you begin paying your monthly living expenses and making discretionary purchases.
BREAKING DOWN 'Pay Yourself First'
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this idea as a very effective way to ensure that you continue to make your chosen savings contributions month after month.
Where Does Pay Yourself First Money Go?
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you will want to set up a separate savings account at your bank.
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set up one account for each savings goal: post secondary, travel, emergency fund etc
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Advantages of Paying Yourself First
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easy way to budget
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effective way to achieve your financial goals
"Don't save what is left over after spending, but spend what is left after saving." Warren Buffett
"We spend money that we do not have, on things we do not need, to impress people who do not care." Will Smith
Step 1: create a savings account separate from your other accounts
Step 2: as soon as you receive money (pay from a job or gifts) set aside a fixed amount and deposit it into this account
Step 3: never touch this money; let it accumulate and let the power of compound interest work its magic