You might think that your budget is too tight to even think about saving money, but like many, you also can’t imagine starting your day without that uber-delicious, hand-crafted coffee drink from your favorite java joint.
The reality is this – many of us have no problem spending $25 a week on drinks and other indulgences, but we fail to put money into a savings account.
One answer to this all-too-common dilemma might be to adopt the ‘pay yourself first’ philosophy.
The concept is simple. When your paycheck arrives, before you do anything else, deposit some of that moola into a savings account. The amount may vary month to month, or you might determine a fixed amount based on your personal budget. Whichever is the case – this out-of-sight, out-of-mind approach to personal finance might save you a great deal – literally.
The pay yourself first budgeting method is low maintenance compared with others, such as zero-based budgeting. It doesn’t require you to categorize every expense or keep a detailed record of your spending. It can also help you focus on the big picture and reduce impulsive purchases. When people save first, they have less money to spend and tend to use the remainder on things they need or value. That doesn’t mean you have to forego that caramel latte with an extra shot of espresso and chocolate shavings, it just means you might decide to indulge in it three times a week instead of five, putting the $12 a week you save into your personal account.
You might think by simply not ordering a fancy drink on Tuesday that you have saved money and, technically, you might be right. But, by physically depositing that money into a savings account, you are proactively saving. The money is no longer sitting in your checking account, taunting you. Out of sight, out of reach, out of mind.
Paying yourself first is a great option if you prefer a hands-off budgeting system or don’t want to feel as though you’re budgeting at all. So, open that savings account and start paying yourself first! Making yourself a financial priority might just be more invigorating than caffeine!
This is a multi-part sponsored series presented with paid support by Telhio Credit Union.
Telhio Credit Union is open to anyone who lives, works, worships, or goes to school in Central or Southwest Ohio. Founded in 1934, originally as the credit union for the Columbus Telephone Co., Telhio is a not-for-profit financial cooperative where its members are also its owners. Driven by its philosophy that members come first, Telhio is committed to the highest standards of responsibility and conduct. Telhio offers a variety of innovative programs, services, and products to support its members’ financial needs. Telhio offers twelve branching offices throughout Central and Southwest Ohio and nearly 4,000 shared branching locations nationwide. Federally insured by NCUA. Equal Housing Opportunity. NMLS #251831