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Do you pay yourself first?

Last post Thu, Sep 16 2010 11:53 AM by whitney37354. 16 replies.
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  • Fri, Jun 11 2010 12:04 PM

    • Pat
    • Top 10 Contributor
    • Joined on Tue, Mar 6 2007
    • Colorado
    • Posts 14,463

    Do you pay yourself first?

    The prevailing wisdom says to put a preset amount into a savings account before you begin to pay your bills or buy things for the duration of the pay period. When we do that, we learn to budget what's left over to pay necessities, rather than paying those first and then using whatever's leftover for savings (which may never happen). Do you put money into savings (any kind - retirement, emergency, etc) before you begin to spend down your paycheck?

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  • Fri, Jun 11 2010 12:06 PM In reply to

    • Pat
    • Top 10 Contributor
    • Joined on Tue, Mar 6 2007
    • Colorado
    • Posts 14,463

    Re: Do you pay yourself first?

    I will admit that it took me awhile to realize how well this works. I put money into savings at the same time I pay bills. It's an important "bill" that I pay each month.

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  • Fri, Jun 11 2010 12:15 PM In reply to

    Re: Do you pay yourself first?

    I used to do something similar back before Mom went into the nursing home. She used to write me a check to pay me back for the groceries each week. Then she turned over her check card to me so that I wouldn't have to wait to be reimbursed for the things I'd get.

    Today I keep up with 2 different checking accounts and 2 different check cards.

    I pay household expenses out of one checking account. Both checking accounts pay interest; at the moment the interest isn't that much due to the economy.

  • Fri, Jun 11 2010 12:19 PM In reply to

    Re: Do you pay yourself first?

    Yes, on the 15th of each month I have a set $ amount automatically transferred from a checking account into savings. When I worked also contributed automatically into a Registered Retirement Savings Plan. Wish I had started a lot sooner!!.

    Having the Bank transfer money automatically is the only way I would manage to put away any savings, other than collecting $5 bills & our Cdn. $1 & $2 coins which helps towards small purchases, Birthdays etc.

  • Fri, Jun 11 2010 12:58 PM In reply to

    Re: Do you pay yourself first?

    Yes, it is done automatically. My retirement comes out of each check and is deposited into my retirement acct. I also have a set amount come out from my check each month to go to my credit union savings account (vaca/gift/small emergency fund). Another set amount goes to my money market account and I use that amount to pay yearly propery taxes and auto/home insurance.

    DH has the same thing: money automatically deducted for retirement and then he has 3 amounts withdrawn: one for his credit union checking (our "fun" money), one amount for our "big" emergency fund (six + months of living expenses) and a third amount that after 6 months buys certificate of deposit. He now has 5 CDs that come due at various times. As they come due, he either reinvests them or cashes them out to pay for things like our new/used truck, carpet for the basement or some medical bills and unpaid maternity leave income help. He cashed in 2 CDs last month and we paid off the Tahoe loan.

    I have to have it done electronically and automatically. Otherwise I wouldn't do it and neither would DH.

    Erika
  • Fri, Jun 11 2010 1:07 PM In reply to

    Re: Do you pay yourself first?

    Yes, ours is transferred to our savings automatically. It's so much easier this way, nothing for me to forget (that was my problem!).
  • Fri, Jun 11 2010 1:11 PM In reply to

    Re: Do you pay yourself first?

    Pat:
    Do you put money into savings (any kind - retirement, emergency, etc) before you begin to spend down your paycheck?
     

    I pay my tithing first, then set aside for savings, then pay the bills.  Any extra goes either to additional savings or to pay down the mortgage.

  • Fri, Jun 11 2010 1:48 PM In reply to

    Re: Do you pay yourself first?

    Yes - a set amount to savings, emergency fund, and IRA. I get paid once a month, on the last business day of the month, and all of those draft automatically on the 5th. They are in my budget to be paid monthly, like any other bill; otherwise, I would just spend it. I know some people don't like autodrafts, but it works really well for me.
  • Fri, Jun 11 2010 2:11 PM In reply to

    Re: Do you pay yourself first?

    Yes, my state retirement, 401k, deferred compensation, and some into my savings account at the credit union are all things deducted from my check before I ever see it.  Also have some deducted for a medical flexible spending account.  Much easier  and that way I'm not tempted to "skip it this month".

    Carol
    western NC
  • Fri, Jun 11 2010 3:07 PM In reply to

    • gayla50
    • Top 10 Contributor
      Female
    • Joined on Mon, Sep 24 2007
    • Western North Carolina
    • Posts 8,491

    Re: Do you pay yourself first?

    of course  just good business .

    Gayla

    Officially Recognized Stretchpert in Frugal Food and Cooking and in Slow Cooker Foods



    Purpose is what gives life a meaning
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