If you have always had trouble saving money maybe you should try the old pay yourself first system. This is how the well-known 401K system is set up. The day you are paid, before you cash your check, your 401K contribution is invested for you. You never see it. Out of sight, out of mind and you are free to spend the rest without stress. If you do not have a 401K put your set amount in an investment of your choice and let it work for you. In life you will experience some windfall profits like passing GO in a Monopoly game or possibly inheritance money. The flip side of this is you will experience unexpected expenses too. Money set aside can be used to pay these emergency bills or invest in something you believe in.
When your set aside money is taken out before your check is cashed you will not miss it. It can be invested in stocks, bonds or starting your own business. CD rates have also increased 4-5% so open a certificate of deposit at your local bank. If necessary, you will be able to borrow against your CD at very low rates. Money that is set aside should always be working for you. Set aside money will make interest for you to spend when you can no longer work and interest will compound on to itself. Do not pay any more interest than you must and start making interest. Money management is a never ending, always changing situation that everyone needs to make work for them.
Pay yourself first is one of the best self-investing systems I have ever seen. You can invest high risk (stocks) or low risk (CD’s) or anything in between. It is up to you. For most families, incoming money is pretty much a fixed figure, yet expenses can be very unpredictable. This means whatever your income, you must set aside, when possible, for your ever-increasing expenditures. Everything can change every year, so your financial plans must evolve from year to year. Money saved will be spent! It will be there if and when you need it.
Your leftover money as small as it may be will compound over time and requires regular maintenance. Trust me. You will sleep better at night with some money in the bank. Money, for most people it seems like, there is never enough to go around – but you can change this. Talk to a financial advisor and get started on a plan that will work for you.
