It seems like everywhere we turn these days SOMEONE is trying to take my money. It's restaurants, food delivery services, car manufacturers, virtual therapy apps...the list goes on and on. Before every paycheck I plan where that money should go to cover my bills: light bills, credit card payments, insurance...whatever it is. Deciding which bill to prioritize feels like picking a favorite child. As if it were that easy!
Suddenly I'm struck with the question that I pose to you this #FinancialTipsFriday which is: "What is the most important bill you pay each month?"
I'm sure that even the mention of bills makes your palms sweat. Me too. But you know what makes my asscrack sweat?? Forgetting to pay a bill and receiving a pricey late-payment fee...or a seven-year ding on my credit score. Oh? Do I have your attention now? ;)
But really, what is the most important bill you have? No, it's not your rent. [pause for gasps] It's not your car payment or your grocery bill. It's not even your therapy copay. It's you. Believe it or not, the most important bill you face with each paycheck is Y-O-U.
Emergencies happen. Paying for emergencies with credit cards doesn't need to happen.
Okay, but what is "paying yourself?" It's this simple: putting money aside that you are investing in you. If you don't have much savings, this is building your savings. Emergencies happen. Paying for emergencies with credit cards doesn't need to happen. This is what a savings account is for: emergencies. They come in all shapes, sizes, and costs; but they come nonetheless.
If you already have savings you are not off the hook! Paying yourself would be investing in a retirement fund or a health savings account (think: do I plan to get old someday?). Oh, and there are tax benefits to both of those. But that's for another blog.
Now look, you may not be able to pay yourself much in the beginning. But paying yourself is the most crucial decision of every paycheck. Do you believe in you? Do you believe in your dreams? I sure do.
Tuck your money into an account that keeps it safe. That means it’s not connected to a debit card. That means it’s not connected to your checking account. This money has to be like a Golden Corral in Massachusetts: difficult to get to.
Wanna put on a concert? Squirrel away 50 bucks every paycheck and see how fast that turns into hiring a pianist or your baritone bestie. Wanna start your own business someday and leave your muggle job? Pay yourself first and tuck your money into an account that keeps it safe and, yes, I especially mean from you.
This isn't about saving up for a trip to Spain or a new iPhone. This is about saving money from your paycheck that will go toward your big life events. That's emergencies and dreams and whether or not you think so, we all experience those.
Your dreams make you dance in your kitchen on a random Tuesday. Emergencies are uncontrollable events that usually result in us not having any money for our dreams. Paying yourself -- investing in yourself -- first means you take yourself seriously. Your boss pays you to do your job and you hate that place! Why wouldn't you pay yourself for all the work you're doing toward your own future??
There are good-interest savings accounts that have little to no opening minimums and that easily connect with your online bank accounts. Banks I recommend are Alliant Credit Union (special deal right now), Marcus by Goldman Sachs, and Ally Bank (I've never used Ally, but they appear in many podcasts/money blogs as a great option) and they all offer comparable interest rates.
Tacos are not an emergency.
Caution: this isn't the savings account you dip into when you want tacos the Thursday before payday. This is money you do not touch. Only for emergencies and dreams. No. Tacos are not an emergency. And a new car is not a dream. Think bigger, folx!
The trick here is: the more you save, the more interest the bank pays you. They will literally pay you for leaving your money in the account. And if saving is paying yourself then you are being paid to get paid. Wild.
So WHAT'S the #1 bill every month??
You got this!