You’ve Heard it Before: Pay Yourself First

Sometimes when it comes to yielding wealth, you think you’ve heard something a million times. But, with such things, it is often the case because it bears repeating. Saving money is one of those things.

“Pay yourself first”

This is a concept that few people really grasp. But it is still true nevertheless. It is very important that you pay yourself first. Before you spend your money on other things, you need to set it aside for later. Try and arrange your budget so that you are living only on 70% to 80% of your income. If your company offers the option, have part of your money put into a retirement account. Then take some of what’s left and put into some form of savings account. I prefer a high-yield online savings account.

When you pay yourself first, it doesn’t mean you have to put your money into something resembling a traditional savings account. I like to put money regularly into stock investing every month. Dollar cost averaging (this is how your retirement account works, BTW) allows you to put in a little bit each month, buying partial shares, and maximize the return on your dollar over the long haul.

And ultimately, that’s what saving money is all about. The long haul. Pay yourself first, and you will find that down the road, you will have much more.