Money Saving 101: That Dreaded Phrase "Pay Yourself First"

If you’ve ever read a finance blog, I’m sure you’ve heard the phrase “pay yourself first.” I’m sure you, like myself, are sick of hearing that phrase because for a lot of the world, we’re really not being paid enough to save a lot of money. What took me a long time to realize is that it isn’t about how much you save, it’s about setting a goal and saving for it. Most of the finance blogs I’ve read and most financial experts in general recommend that you have a $1,000 emergency fund. This is for when your car breaks down, or you have to go get stitches because you broke your head open or whatever your emergency may be. What does NOT constitute an emergency is a new pair of Nikes or a new Coach purse or sushi with your best friends. It’s for an actual emergency. $1,000 is a decent amount to save for but not something that is completely out of reach.

How do we pay ourselves first when we barely have enough to pay for our normal bills? 

If you are paid with direct deposit, see if you can be paid into more than one account from the same paycheck. Set a small amount to deduct from each paycheck to be deposited into a savings account. Let’s say $5 per paycheck. If you do $5 per paycheck and you are paid 26 times per year (biweekly), that will equal $130. That’s a start. $10 per paycheck: $260. $20 per paycheck: $520. $25 per paycheck: $650. $50 per paycheck: $1,300. Not too shabby, even if it’s only 5 to 10 per paycheck. That’s $130 or $260 you didn’t have in savings before. 

What else can you do to pay yourself? What else can you do to add to that emergency fund?

If you’ve been reading before, you’ve seen me write about “cutting the stuff.” If you’re the type that would sell your stuff, then that $$ could be added to your emergency fund as well. 

If you’re the type that pays in cash, then you’ve probably got some spare change around. Put that in a jar until it’s full and then take that money to the bank and put it into your emergency fund. 

Take on some odd jobs. I used to do supervised visits on the side to supplement my income and I would put all that in my rainy day fund.

Don’t eat out so much. If you’re the type to eat out every night, spend a couple days cooking at home. That will save you some big bucks by the end of a month. 

Instead of going to Starbucks, make your favorite cup of coffee at home. That’s $3 to $4 per time you don’t go to Starbucks. Put that money in your savings.

Those are just some basic ideas. What’s the point of this blog post? Set a goal and find ways to save for it. Whether it’s $1,000 for an emergency fund or $500 for a new TV or $30,000 for a down payment on a house.  Get creative. You’ll find a way to achieve that goal.