Pay Yourself First

paycheck-for-all

First thing’s first, you must find a way to pay yourself before anyone else.   What I mean by this is, you need to stash some money right off the top when you get paid.   It doesn’t matter how much you keep for yourself (be realistic with your budget….you do have a budget, right?), but you must find a way to put a little cash away every pay check.  If you do this first, then you can plan accordingly to pay all the rest of your bills and follow the budget that you’ve created.

In the past, I always paid all my bills right after pay day.  For me it was even more difficult because I only got paid once a month!  After I got paid, I went ahead and paid all of my bills right away.  Unfortunately, that normally left nothing for me at the end of the month.  Once I realized that I needed to pay myself first, I always found a way to keep that money stashed.  I told myself that I wouldn’t touch it once it’s in my savings account.  It’s amazing how you can always find a way to pay yourself before everyone else and still get by! Everything else seems to always work itself out by the time the next paycheck comes.

Over time, you start to realize that you have accumulated a significant amount of income from that contribution.  It’s amazing how it can grow.  Remember, when the budget is tight, it’s really about baby steps to get ahead.  You have to be patient….and frugal!   Keep to your budget, stay disciplined and focused on saving, and you will be shocked how it can add up.   Start today and work to secure your financial future!

Budget?…Who Needs A Budget?

"Starving" piggy bank

Do you have a budget established?  If not, you absolutely need to get one started right now!   It’s imperative that you know where every cent of your income is going.  Without this information, you cannot clearly understand what you need to do with your finances or where you are going wrong every month.  I highly recommend using Mint.com.  It’s really easy to set up and better yet, it’s free!

With Mint.com you link all of your bank accounts (secured, read-only) to the program, so it can track money-in/money-out transactions.  You can also link any credit card accounts or loans, so you can track everything in one convenient site.  Once you set your own budgets, you can easily track your spending by categorizing each and every transaction.   At any given time, you can see exactly what you have spend for each budget category.  If you go over budget for a given category you can easily see it, then it helps you to understand how to plan your finances accordingly.   Once you go through and categorize every transaction, you will be able to see trends in your spending.

Mint.com gives you some really cool tools to evaluate trends in spending, month over month or year over year.  It also gives you suggestions on how to save money every month by applying for a lower interest credit card, for example.   It actually gives you links to apply for the best cards available (not that I’m preaching the idea of getting credit cards, but it’s just one more nice feature).  I even use Mint.com to link up to my asset accounts like Ameritrade, so I can monitor those as well.  Give it a try, it’s really easy to use.

Remember, without a budget there is really no accurate way for you to monitor your spending.  If you don’t know where your money is going, how in the world are you ever going to be able to plan to get ahead of the game!   Obviously there are many different types of programs available for this purpose.  Even a pad and pencil could do the job.   But to be able to link everything you have (income, debt, assets, etc.) all in one place, you can’t go wrong with this program. I like to keep it simple…..and free!

Is Time On Your Side?

Time-Clock-Money-Vial

Depending on your age and current financial situation, time is critical for your future financial success.  Obviously the younger you are the better the situation because you have more time on your side to start the process of investing in your future.  You also have more time to cover the ups and downs of life in-general, including life changing events and the current climate of the financial world.  Although you have a significant advantage starting out at a younger age, just getting the process started at any age is better than not doing anything at all.

For me personally, I never understood (or really bothered paying attention) to my long-term financial situation.  This is unfortunately all too common with working-class folks like myself.   I think a lot of people just assume that everything will just work itself out and something like Social Security (SS) income will provide for them after they retire.  The reality of this proposition is frightening to me when you actually look at the sheer number of your SS benefit, in comparison to the type of living you are accustomed to.

It doesn’t take a mathematical genius to figure out that you simply can’t afford to maintain the type of lifestyle you currently have working now, with only a fraction of that income coming in from SS to live on.  With that said, do the calculation yourself on paper (or in your head, because it’s really that simple) then start understanding the realization that you will need other sources of income to be able to come close to your current standard of living.  As I mentioned earlier, it doesn’t really matter what age you are, starting right now is the key to moving forward.    I certainly wish I would have started to aggressively save money and investing years ago, but raising a family and working pay check to pay check was my dilemma, like so many millions of other people.

The bottom line here is, start paying yourself first (saving money) every month.  Even if it’s $10, $50, $100 every paycheck.  Start there first, stay focused on this task, and never stop.   The money will compound after years of saving and you will be shocked how much you can accumulate over time. Hopefully the money will be invested in an account that will give you a decent return on your investment.  That is a discussion for many more blogs, but for now let’s keep it as simple as putting money in your savings account.  After all, we all should have a savings account that can be quickly accessed in case of an emergency.

I can’t stress this enough, it’s very important to build up a savings account first, then investments will follow.   Of course reducing/eliminating any and all debt is also the key to long-term success.   Many more blog posts to come on that topic also.   For now, get that savings account built up to a comfortable level, then consistently add to it every pay check.  You will be amazed at how much it will grow year over year.

How Can I Get Ahead?

the-way-to-get-ahead-is-to-start-now-william-feather

Working paycheck to paycheck?    Barely getting by?  I know this feeling myself and swore I would find a better way.   Little by little, reducing debt and putting money in savings was a sure way to get ahead of the game.   Can YOU ever get ahead?  I’m here to tell you that you can.  It takes time and dedication but if you stay on course, you can put the debt behind you for good and actually have some money in the bank for that desperately needed cushion to help you stay ahead.   This website is dedicated for the average working class person to get ahead, one step at a time, and never look back.  It’s about more than just money, it’s a mind-set that will change your prospective about your finances forever.    Join me on my own personal adventure to financial freedom by eliminating debt and creating an environment for long-term financial success with limited resources.