One of the principles that David Bach emphasizes in his book, Automatic Millionaire, is Pay Yourself First. This concept is hardly new. You find this stressed in blogs and numerous business books. You hear it from various acclaimed financial experts. Even your own parents admonish you with this! But what really is Pay Yourself First? Is this rule really that difficult to follow?
It implies that before paying your bills, buying essentials, before doing anything, put aside a share of your take home pay to savings. To many, this type of saving habit is easy enough to grasp but very hard to adhere to. There is a heap of bills to pay and there is insufficient left that can be saved! The real issue is the mindset that folks have towards financial management. You must consider switching your psyche and the way you perceive things in order to make a big improvement on your way of life. What you’re accustomed to hearing are spending habits and saving what’s left. This makes an emphasis on spending thus making spending, instead of saving, your top priority. You must reverse your mindset in order to save first then spend what is left.
Despite what other people say, paying yourself first does not require a great amount of self-control and discipline. And it positively would not entail an important overhaul on the lifestyle. A small, unnoticeable dent on your way of life will probably have a significant impact on your future. The easiest way to do this according to Bach is to make savings automatic. You can set up to get a certain percentage of your paycheck to become redirected to your savings or retirement plan. Allocating money for your emergency fund should also not be forgotten. This reduces the potential risk of dipping into the honey pot during unforeseen circumstances.
When you have overcome the barrier of savings allocation, you’ll be able to go on to making everything automated. You could have your money earned directly credited to an account apart from your savings and reserve your debts to be automatically debited from there. Set up your bills to be paid ahead of the payment date avoiding unnecessary interest rate payments. This procedure might be more convenient and less prolonged. It also will offer an idea on how much you must start. You may then structure your budget from the amount which you have left and live within your means.
Assessing your assets and liabilities is likewise vital to financial control. List down every expenditure, allowing for perhaps the smallest expense. This is a method of discovering your spending pattern. At the end of the month, take a look at your list and find out which items are unnecessary, excessively, and you can live without. Instead of spending your funds on these wanton or excessive items, why not add it to your savings? It is likely to make a lasting difference on your finances. You don’t need to live in an austere type of life. You could keep a happy and healthy lifestyle while securing your future.
Starting earlier in life means more financial freedom in the foreseeable future. No matter your age, it is not far too late to get started on saving. The Automatic Millionaire discusses Pay Yourself First in a more in depth manner. The book includes techniques, guides, and techniques to regain power over finances and ultimately fulfilling your main goal of financial security.
My name is Mike N. Alger. I enjoy playing golf, cooking, surfing the net, and reading blogs and articles. I’ve read about Automatic Millionaire and it’s a personal finance education program designed for one to grow wealth and finish rich on any income level. Included in this program are the techniques, guides, and strategies to take charge of your finances and attain a financial security.