Pay Yourself First – Financial Literacy Saving Series

by Allacyn - Apr 18, 2011

Pay Yourself First, I like the sound of that, but apparently in America we find this hard to do. Now, when I say “pay yourself first” I don’t mean go out and buy anything you want and then worry about paying your bills. I mean pay your savings accounts first before you pay your bills. The logic is that if you put your money into savings first you will actually put money in savings.

One survey about savings found that 50% people between the ages of 25-34 would not be able to round up $2000 within a month for an emergency. That means that losing a job or paying for a wrecked car could cause major financial problems. This is why there needs to be an emphasis on savings.

The amount of savings we should all be aiming for is to set aside 10% of our income a month. This sounds like a lot and for some of us it might be, if this is the case start smaller and work your way up to this amount. If you have never had a savings account before it might be easier to start smaller so you get used to the idea.

One great tool we have these days is direct deposit, where you can have money automatically taken out of your paycheck and set aside into a savings account. This way you don’t ever have to see the money or feel like you are missing it. This is also a great way to keep you from dipping into the savings account.

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