Paying yourself first is crucial to maintaining good saving habits long term.
All Money In
Pay yourself first will be a recurring theme and mantra you hear as you progress in your financial journey. Taking your piece of the pie before bill collectors and services have their way with it ensures that you’ll have a nest egg in place for the future. The key is saving what you pay yourself. This engaging video from Blue Eagle Credit Union walks you through this important principle.
The Pitfall of Passive Saving
Putting money aside for yourself is a form of active saving that reinforces itself over time. The opposite approach to this would be passive saving, meaning you save my buy limiting monthly expenses and save the remainder (in theory). The downside is that in most cases you end up spending the money that you thought you’d have left over because it sits in a slush fund with your other expenses. When the money is intentional set aside the fund becomes more stable.
If you’re curious on how to separate money for your family take a look at this video for the 7 bank accounts every family should have.