Tag: pay yourself first

Money principle #1

Pay yourself first…make sure that you have automatic payments set up to invest in yourself. Ideally, you want this set up going to a low fee index fund. Time and compound interest will be your best friends. The earlier you can start regularly contributing to this fund, the better off you’ll be. The best part about having it automatically set up is that you don’t have to remember to keep investing every month. If you want to invest more, you can. But here, it’s basically like a subscription model (set it and forget it).

If you’re saving up for a specific purchase like a vacation, a new car, a house, etc, set up a separate account and automatically transfer money to that account. Have it set up for every paycheck. If you don’t “see the money” in your regular checking account then you’ll be far less likely to spend it. This will help you actually hit your saving goals and then you won’t have to use credit to purchase your consumer goods.

Pay yourself first

Just like with investing, you need to “pay yourself first” by making time for self-improvement. Everybody has the same amount of time in the day. Most of us fill up that time with work, housework, watching tv, or going on social media. But how many times have you heard people say that they are too busy to exercise or that there aren’t enough hours in the day?

Many people feel that they have a shortage of time. I understand this and feel that way too. But our problems often stem from poor time management and how we can rearrange our schedule to make it work optimally. For me, I like the idea of working on self-improvement first thing in the morning. My thought process is that just as you should automate paying the first 10% of your paycheck to yourself (saving/investing), you should also automate spending the first part of your day improving yourself. I like using the morning for working on myself because it’s quiet, the day hasn’t started (so there are no “fires to put out”), and my motivation is at its highest (I’m not tired from a long day of work). Not only that, but it feels good to start your day off right. It’s easier to keep the momentum going by starting right as opposed to starting and stopping throughout the day.

Although it can be daunting to feel like you have to do a lot in the morning before heading to work, you really don’t. Start with a little at a time. Read one page of a book you’ve been meaning to read. Do ten pushups. Stretch. Plan your day/set your intentions. Think about/write down what you’re grateful for. These are just a few examples. Just remember, every little bit counts. If you can improve yourself even fractionally each day, you’ll amaze yourself at how much that adds up over time. There is no greater return on investment than investing in yourself.