Basic Laws Of Making Money #1

Pay Yourself First

The only way you’re ever going to be able to save any money is to pay yourself before you pay anyone else. If you pay everyone else – all of your bills (like gas and electric), plus all of your creditors, (like car loans and credit cards) before you set aside something for yourself, you’ll never have anything left to save.

If you really want to be sure that you’ll put a little something away for a rainy day, then set that money aside before you start to pay your bills.

A good amount to shoot for is 10% of your gross earnings. That’s before taxes, social security and all of the other things that are taken out of your paycheck before you even see it. So if you make $3000 per month, your target savings would be $300 per month.

You may have to start at a lower percentage and gradually work your way higher. The important thing is to start today. You’ll probably have to cut back on some of the little luxuries you enjoy from time to time, but it’ll be worth it in the long run.

A simple way to remember to always pay yourself first is to make your savings a bill to yourself. In other words, put your name into your list of bills (at the top). Then every time you sit down to pay your bills, you’ll remember to put that money into your payment account to yourself.

A sound savings plan is the foundation of all wealth.

Next time, we’ll talk about the 90 day rule of money.