Getting Out Of Living Paycheck To Paycheck By Paying Yourself First

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Do you, or don't you?

Keep your grocery receipts, that is. Most of us may have picked up the habit from our mothers, who may have trained us to do practical accounting by keeping track of the things we buy. Others may have found that they need to keep track of where the money went, after months or even years of earning so much but keeping so little.

Whether you do or don't, what matters is that you get yourself free of living from paycheck to paycheck.

One open secret that savers and wealth gurus have been teaching is how to "pay yourself first." If you think about it, it surely makes sense. If an employee just lets life drag them through, there's always one more debt to pay, one more expense to shoulder, one more thing to spend your peso on.

However, if you lived life chasing after the "one more" peso-sucker in your life, you'd never be able to get out of debt, never be able to get out of living from paycheck to paycheck.

Thus, in order to be free of this, you have to make an effort to make your savings a priority.

Before you even pay your bills, before you take care of your debts, make sure that you've set aside a portion of your income for savings. Some personal finance bloggers recommend working up to saving 10% of your income incrementally, starting from a mere 2% of one's income. For others, they believe that the percentage or the benchmark is up to you. As Get Rich Slowly says, it's pretty easy to save 1% of your income. Later, you can work towards saving 3%, 5%, and so on. One inspiring anecdote he tells is of how his wife's savings percentage jumped to 24% from 8%, as her salary increased. And that story was made possible by the habit of paying oneself first.

One tip you could pick up from Get Rich Slowly's anecdote regarding his wife's savings achievement is that she never saw the money she was saving; thus, she never got to be tempted to even think about spending that kind of cash. Nifty, right?

Over time, you can grow your savings account. You can let it grow to an unlimited value, or you can top off at a certain amount and then invest the rest. Remember that aside from one's emergency fund, one also has to save for one's retirement, as well as the children's college funds.

So many things will get freed up once you start developing good savings habits. It would be great to start by paying yourself first. Here's to you and to your prosperity!