Pay yourself first

Before paying your bills, make a deposit into a savings account and contribute to a retirement account every week.

            Even if you feel like you don’t have enough money, if your employer offers a 401K, take advantage of it.  It earns interest tax free until you retire.  Even when they don’t match your contributions, or only match 10%, it is worth it.  I began putting in ten dollars a week when I was making so little that I was eligible for the earned income tax credit.  I felt like I would not have enough, but I was surprised that when I finally decided to pay myself first, I was able to make ends meet and still buy pizza once a week.  When I left that employer, I had $5000.00.   By the time I retired, it had doubled in value.

If you make your own IRA contributions, check out No Load Mutual Funds like Vanguard and Fidelity.  They are relatively cheap, and not as risky as individual stocks.

Many financial analysts recommend having what you need to live for 6 months in a savings account.  A great goal, but I think it is unrealistic for many people earning less than the average income in their area.  If you don’t have that much in savings, just have a credit card for emergencies.   You need one to establish your credit rating anyway.  Just make sure you know how much interest you are paying, and pay down the balance as soon as possible.

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About Betti

I love to meditate, read, sew, and crochet. Most of all, I love to share what I have learned in my time on the planet.
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