At the end of every month one of the first things I do, after kissing my wife for fear of a telling off, I check to see whether I’ve been paid and more importantly paid correctly.
I’m obsessive about my bank account and what goes in and what goes out and I know exactly when bills are going to be paid.
The thing is before bills have even been considered there is a regular amount taken out as soon as the money goes in. Ordinarily, I would be stomping around shouting foul if my reconciliations didn’t match, but I’m not worried about this one bit as I know that this money has gone into another account.
The reason for this is that I have set up a standing order for a regular sum to go into a savings account, therefore, paying myself before anyone else gets their hands on my money.
1. You’ve worked hard for it, so why not!
I get up early in the morning to drive to work. Once I’m there and have logged on the realisation sets in once that I open my emails that I am going to be sat at my desk and spend hours of my life that I’ll never get back either being shouted at or telling someone, who is potentially paid a considerable amount more than me why what actions that are undertaking or not as the case might be, is potentially costing my employer substantial amounts of money for them to do it anyway.
I, like many, work hard for what I earn and to think that the time spent earning a living is purely going to towards bills without me being able to enjoy any of it is simply just a waste.
2. You never know what is around the corner
There is no such thing as a job for life and for that reason it’s important that I have an amount of money that would enable us to cope for a period of time whilst I find myself a new job. Popular blogs and money websites I regularly read suggest that you should have at least six months of savings as a contingency.
Not only are jobs uncertain nowadays, our bigger purchases such as washing machines and televisions so not appear to have been built to last and no doubt at some point something is going to have to be replaced or we are going to have to get someone in that is handy with a hammer to come and fix something around the house.
I know that there are certain things that we would struggle without so having that money available to buy new or get someone out should we need to lifts a whole lot of weight off our shoulders.
3. It focuses your mind on only those things that I can afford
I like tech and everything shiny and new and whilst I generally tend to research a potential purchase to the point that I no longer see any value in it once in a while something will come out that I just have to have and paying myself first allows me to do this without any guilt or buyers remorse.
My wife and I also like to be able to buy a treat meal from Marks and Spencer on a Friday night to celebrate the end of the working week, I know that we could probably make it cheaper ourselves, but we’ve been at work all week so why would we want to and besides neither of us are fantastic cooks and it always taste good.
4. See your savings pot increase
I’m quite competitive and treat saving as game, granted it wouldn’t make it on to the list of the most fun games to play, but for me it is. I always like to better my savings than in the month prior, therefore paying myself a regular amount means that every month starts on a level playing field and makes it easier to track how much has been saved.
With interest rates so low I am now having to look at alternative ways to make my money work for me, this could at some point include investments and business.
4. It gets me thinking about my financial habits
As someone that is always trying to seek out ways to make more money and make what do have work harder for me, I believe a financial mindset is just as important as anything else.
I’m under no illusion that I’ll ever be rubbing shoulders with the likes of Richard Branson, Charles Dunstone or Peter Jones but there is a lot that can be learnt from the wealthy and their own financial habits which include but obviously not limited to paying yourself, delaying any spending decisions, setting financial goals and having more than one income stream.
I know that paying yourself isn’t going to be easy for everyone, but even starting off a small standing order into another account can add up at the end of the year and how useful would that be, whether it be planning for Christmas, treating yourself without fear of debt or making it work for you and investing it.