Pay Yourself First
Saving money is one of the hardest yet most important things we to do. Despite this, we all struggle to save when it shouldn’t feel so complicated to save our hard earned income.
Yet, more than half of Americans fail to save enough money. To save more money we have to find hacks to avoid overspending on unnecessary things. In the book Rich Dad Poor Dad, Robert Kiyosaki mentions the concept of paying ourselves first.
His initial definition and context are to pay yourself first in your business, but the concept works just as well for putting money in our savings account every week. We all need to save money for our own reasons and although it can be hard to do, paying ourselves first by putting money in our savings can help us reach our financial goals at a faster rate.
Paying yourself first in terms of saving money means — save money before you spend what’s left over after bills and expenses. Keep enough for your expenses and personal spending money but don’t keep more money than you need at your disposal.
Prevent yourself from being able to overspend cash because it is available. That way, when you do need a large sum of cash quickly you’ll have it without having to worry about how you might get it.
I began using this hack as a way to avoid overspending my money and I quickly found myself, finding ways around my regular spending habits. Some days, I spend very little, if at all unless I really have to and it feels good.
My savings account quickly grew by saving my money first instead of saving what was left. This has motivated me even further to reach my financial goals because I finally found a way to save more money every month.
We all save money for different reasons. It could be to achieve financial freedom and security or to invest in something that will pay off in the long run. Maybe we save for all three reasons, I know I do.
Saving money gives us the freedom to save for a house or a new car that we can’t afford just yet. Filling our savings account also offers financial security. If an unintended emergency comes up, such as being let go from a job or having to pay medical expenses, we have something to fall back that will ease the loss.
Saving money is also a practical way to save for investments and retirement. Instead of investing when we have the capital sitting in our checking account we can save it up to invest a larger sum in a few months or years down the road.
In addition, retirement becomes more attainable without needing to work past 65 to support yourself and survive. Retirement should be the time when we can finally relax and look back on everything we have done in our lives and feel fulfilled instead of bitter and disappointed.
Regardless, by not saving money we greatly increase our chances of poverty because we have nothing to support ourselves with.
Before we can start saving, we have to internalize that we must cut back on unnecessary expenses and on things we don’t really need or use.
Initially, it’s difficult to stop spending money on eating out and the small things we purchase throughout the day. At the moment the luxuries and items we purchase offer pleasure but we sometimes fail to look at the bigger picture with the money we spend.
We fail to look into the future which can bring worse consequences. A new car might look cool and have more specs but if you don’t need it, save your money instead of going into debt you don’t need. We have to be able to sacrifice certain things in the moment in order to be better off in the future.
Hack your mind into saving by limiting the cash you could spend on a weekly basis. Save more than you spend. And if you can’t save more than you spend, save as much as you can, even if it doesn’t seem like much. Soon, you’ll begin feeling more comfortable and confident because you have fewer things to worry about.
The more money we save, especially combined with wise investments, the more freedom we will have because we won’t be as bothered by the burden of having to make ends meet.
We can live with less stress that allows us to be happier by being more relaxed and having more time to spend with our loved ones. Financial security is the first things we have to do to live comfortably in a capitalistic society.
Sometimes, the hardest things to do offer us the most opportunity to grow. Without saving, we succumb to the rate race and live constantly chasing a paycheck.