I’ve been blogging about money for quite awhile and I have to admit that I’ve often felt like I’ve discovered all of the nuances of my financial life. Why I do what I do with money, the situations that trigger negative financial decisions, and the situations that trigger positive financial choices.
There Was 1 Thing
That I continued to struggle with and it has been very frustrating. That one thing was saving money. Now, don’t get me wrong, I’ve been able to save for things that are important to me:
- Epic Travel (and good food)
Umm…so I have consistently been able to save large amounts of money for travel. in fact, saving for those epic life moments was so easy. I had an end goal in mind and it was so easy to focus on.
Saving for emergencies, saving for future events that were abstract in the extreme has been incredibly difficult. I am not alone in experiencing struggling with building this important financial habit.
I’ve tried and tried and failed abysmally each time. I just couldn’t maintain a substantial amount of savings in my account. The thing is, I now work for myself and this sorry state of affairs was no longer going to work. And, I didn’t want to live so close to the bone.
I decided to try something different, something that I’d never done before.
I decided to pay myself first.
And, this one habit has changed everything. This year I began a money journal. Basically, every day I would check in with my bank accounts, my debt, etc. and would write about how my daily money situation made me feel and consistently I would be upset about my anemic savings accounts.
My old budgeting process would begin like this:
- Figure out my monthly budget.
- Begin paying on monthly expenses.
- Allocate remaining amount towards my savings accounts.
I would also pay ahead on reoccurring expenses, and stock up on essentials. My system wasn’t all bad because I was aware of the importance of building a buffer into my life. The problem is you need a cash buffer too.
I grew up watching my mom stock up our pantry, pay ahead on bills, and put everything and everyone ahead of us even though it felt like she was preparing for emergencies. And, she was. But, we never had extra cash. We were one accident away from disaster and I’m so thankful that we didn’t have a huge life event that would have financially devastated us.
Again, my mom’s system wasn’t all bad. The only bad part was not putting away extra cash. To be fair to my mom she wasn’t earning a lot and I think when you’re not earning a lot the idea of saving for the future just is too much to focus on.
However
I am no longer interested in being last on my list. It sucks. And, when I began putting myself first I felt empowered in an unexpectant way-I mattered…to me! How do I embrace the process?
- I save 20% of gross income earned FIRST. And, I figure out the 30% on my gross earned income that I have to pay for taxes (because I work for myself).
- I pay my bills.
- Then, I pay extra on reoccurring expenses (a nod to how I grew up). Bills such as my electric bill, insurance, etc. I pay ahead as much as possible.
- I maintain a well-stocked home. No running out into a snowstorm for me! I always have plenty of high-quality shelf-stable food, nut milks, and water on hand.
- I use what I have and focus on side-hustle opportunities that will bring in more opportunities to save.
- I practice gratitude daily.
- I’ve embraced minimalism. I’m just over accumulating things. I would like to accumulate: experiences, good people around me, and money.
Simplifying my wants and needs and rethinking my financial process has been a huge, huge mental shift. In my lifetime of being last on my list, being first has been a revelation.
Do You Pay Yourself First?
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Gratitude daily is a geat deal, also if I’m debt free I’m really focused on savings for financial goal 8like home deposit) but I give to myself a little treat every week, obviously taking my budget undercontrol:P
I think that you make a really important point which is to build in treats into your budget. I try to do that so that I don’t go crazy and spend like a crazy person.
I do the same thing, I save after I pay my bills and whatever else I want to do and not before. It has definitely led to some frustration lately, especially not being where I had hoped to be in regards to my savings and debt. Thanks for reminding me that I need to put my future self first!
It just feels really different and I was surprised by how it affected me emotionally. As money comes in and I take the action of figure out my savings amount I’m reminding myself each time that I come first. It makes me feel good 🙂