We are back again with another tip to help you grow your wallet and manage your money better. As an addition to last week’s tip, WalletFriend Wisdom Tip #6: Setting an emergency fund, we bring you another tip that is just as important as saving and budgeting.
We bring you the one of the oldest rules in personal finance: the golden rule of paying yourself first!
What does it mean by ‘paying yourself first’? It has to do with everything you’re saving.
The concept is simple. It means that when you receive your pay check at the end of the month, you should pay to your saving account, financial goals and debt first before paying for other things like entertainment budget. Always remember the 50/20/30 budget.
So why first? This is because most people do not save enough after paying all the necessities. Hence, we should start to treat savings and financial goals as bills with the highest priority. As mentioned in our previous tip #6, so you could use the fund in case of any emergencies instead of using your actual savings so you could achieve your financial goals.
Finding this tip difficult to follow? We totally agree! But remember our previous tips? The amount does not matter as long as you start somewhere and follow your plan strictly. Again, self-discipline is the key.
If you make this as a priority and manage it like a “bill”, you will be forced to make budget cuts elsewhere in order to make more room to pay yourself first. In the end of the day, it doesn’t matter how small or big the amount is and as time progresses, you will see the usefulness in this and increase the amount as your budget allows you to.
We hope to bring you more tips in the future of growing your wallet!