Millennial Money Tips - #3 Pay Yourself First
Ok listen up ladies, today we'll be focusing on your pay day (woo-hoo!). Who doesn't love payday? Our obsession and the highs we feel when getting paid has often been compared to a drug addict getting their fix - yet we all know what happens once the drug wears off...
A typical payday for most of you may go something like this:
- Your company or client pays you for the work you've done. Yay money!
- You use that money to pay EVERYONE on your list - your landlord or mortgage company, your cell company, your grocer, your dentist, your hydro provider, and so on. So your money comes in only to go back out again. Goodbye money, it was nice knowing you.
- All euphoric feelings have left and you're left feeling like you didn't really get paid, or that you have nothing left to show for all your hard work. The money simply made a temporarily pit-stop in your account on it's way to somewhere else.
How many of you can relate? Ladies you work hard for your money and you should be left with something to prove for it (and I don't mean a heap of clothing, shoes, or stuff). Which leads us to today's money tip....
In our previous post you were given a budget template (which I hope you are now using) to help you prioritize where your money is going. Since Paying Yourself First is top priority, then it should appear in your budget at the top of your expense list.
You may be wondering how much should you pay yourself? Is there a rule? The answer is as simple as "How much do you want to pay yourself?" Notice I didn't say "how much can you afford to pay yourself?" The government takes it's share before anyone else gets paid, and so should you!
When I first started I set the amount at a workable 5%, after all my budget was a mess, I owed thousands to my creditors, and I would spend uncontrollably on fast-fashion. As I found ways to cut back on my expenses, to make more money, and pay off my debt, I was able to slowly increase this amount to the 35% that it is at today.
Imagine being able to keep 35% of what you make? You worked for that money - no one else did - so if anyone deserves to keep your money it's you!
Success Tip: To be successful at Paying Yourself First you will want to immediately transfer the money to a separate account - whether it's your TFSA, High Interest Savings Account, Direct Investing Account, etc. (See TIP#1) Whatever you do, do NOT stash the money in a jar or put it under the mattress like your granny used to do - that money will only tempt you to steal it from yourself the next time you want to buy something that's not accounted for in your budget. Anyone who's tried to quit smoking knows not to leave a pack lying around the house!
Pay Yourself First - You'll see how quickly it all ads up and how much happier you'll be on payday knowing that your money's not all on it's way out.
Feel free to leave a comment, or share your stories about paying yourself first in the comments section below.
May your journey be prosperous.