Creating a Savings Plan: Pay Yourself First

Creating a SavingsPlan: Pay Yourself First
You’ve probably heard the phrase “pay yourself first.” But whatdoes it really mean? It means you should consider your savings account in thesame manner you consider your monthly bills—as a necessary expense. In fact,you should pay yourself before youpay your monthly bills. Professional blogger J.D.Roth lists these three reasons why:
·        When youpay yourself first, you’re mentally establishing saving as a priority.You’re telling yourself that you aremore important than the electric company or the landlord. Building savings is apowerful motivator—it’s empowering.
·        Payingyourself first encourages sound financial habits. Most people spend theirmoney in the following order: bills, fun, saving. Unsurprisingly, there’susually little left over to put in the bank. But if you bump saving to the front—saving,bills, fun—you’re able to set the money aside before you rationalize reasons to spend it.
·        By payingyourself first, you’re building a cash buffer with real-world applications.Regular steady contributions are an excellent way to build a nest egg. You canuse the money to deal with emergencies. You can use it to purchase a house. Youcan use it to save for retirement. Paying yourself first gives you freedom—itopens a world of opportunity.
Virginia Savesoffers a variety of resources to help you get started—join today!