I’ve always been an advocate for paying yourself first because doing so enables you to have complete control over a portion of your money. Since you work so hard to earn the money that you bring home every month, don’t you deserve to take the first cut? I agree that it is ever so important to make sure that bills are paid in a timely fashion so that your credit isn’t jeopardized, but that is why it’s necessary to make a budget of all of your expenses so that having money for yourself is a possibility. I once heard Jim Rohn say in one of his seminars that a family who brings in $2,000 per month (this was a long time ago) will tell you that it takes $2,000 to keep their heads above water. He went on to say that a family who brings in $2,500 per month will tell you that it takes $2,500 to keep their heads above water. The question that he asks following those two statements is ‘What happened to that $500?’ I believe that an increase in income directly correlates to us expanding our lifestyles. I’m not saying that we shouldn’t enjoy our money, but I think that it’s better to evaluate your situation and decide whether to build capital now for later or indulge in instant gratification.
Perhaps a solution for some people would be to have the amount they want to pay themselves deducted from their paycheck or checking account every month. This would make the process hassle free and automatic so that it gets taken care of without fail. If you find that having money deducted from your pay would put you in the negative with your bills, there are two possible solutions to this. The first thing you could opt to do is still have the deduction take place, but have it for a small amount. Even if $5.00 a month is all you can afford to do, the important thing here is that you get yourself into a habit. Once you see your money start to accumulate after awhile, you will be motivated to set aside more and can start to rearrange your spending so that you are in a position to contribute a greater amount to yourself. The second option is to take care of the rearranging process immediately. Go through your expenses carefully and meticulously and see if there are any unnecessary things that you spend money on that can be nixed. After you’re confident that you’ve nixed yourself to the core, take that money that you will no longer be spending on those miscellaneous items and set it aside for yourself.
I recently went through the nixing process myself a few days ago. I was doing my monthly accounting for the month of July and I found that I was spending far too much money on coffee. Stopping in at Starbucks and Dunkin’ Donuts was becoming a regular thing that was costing me, on average, $1.50 per day. After being fed up with my spending carelessness, I went out and purchased a personal coffee maker from Target that ran me only $15.00 (equivalent to the price of 10 cups of coffee) and then ran over to Dunkin’ Donuts and purchased a bag of Hazelnut coffee grounds which came to $10.00 (equivalent to the price of about 7 cups of coffee). The bag of grounds makes 40 cups of coffee which means that instead of getting 7 cups for $10.00, I’ll be getting an extra 33 cups for the same price just by making it at home. So by making a one time $15.00 investment in a coffee maker (that has a reusable filter) and a $10.00 investment in beans every month, the coffee maker will pay for itself eventually and I figure that I’ll be saving myself $30.00 per month (taking into consideration milk and sugar). The bright side of this situation also includes the fact that I’m not really losing anything by doing this. I still get the same coffee that I love but I save quite a bit of money going about it this way.
The key here is that it’s vital that you cut back but to keep in mind that you’re doing so in order to keep more money in your own pocket – nobody else’s. Try to find other, less expensive alternatives for yourself as well so that you don’t think of cutting back as being a painful experience, because then you will have no incentive to continue doing it. You are the only one who has the power to make the choices that will enhance your financial future, and it’s up to you to make the proper decisions.