Exjackly

As we go through life, we are constantly looking to the future. Most of us even make an effort to prepare for the future too. Financially, that generally consists of finding ways to save money and invest it for the long term. The question is, how do you save enough to meet all your needs in advance? College is expensive, new cars are pricey, and the cost of retirement is staggering.

The answer lies in how you look at money. It is possible to save enough to reach all of your goals, but it requires the correct philosophy and follow-through. This series of articles is going to look at various ideas about how money and life interact and how to manage both positively.

The first philosophy is Pay Yourself First.

Saving money is like paying yourself or paying your family. Yet most people’s saving consist of what is left over after everything else has been taken care of. I would argue that our families are the most important people to us, so why do we put them last on the money list?

Instead, we should pay ourselves and out family first. Money for savings should come out of our income first and but set aside where it cannot be easily touched. That way, we do not even see the money we are paying ourselves unless we make a special effort to look.

Having it separate also gives us a great psychological advantage in efforts to avoid spending it. If our savings are mixed in with our spending money, it is easy to talk ourselves into spending just a little bit extra or splurging on ourselves because of how well we are doing. Having it separate makes it much harder to rationalize. When you pull from that other account, there is no way to hide that we are stealing from our savings.

Parent Article

Saving Philosophy Collection