Sunday, April 10, 2016

Pay Yourself First, and then the bills.

The best way to be Self-Sufficient is to have money set aside for those unexpected events that happen in life. Having a Savings account is very important and is a vital tool in being Self-Sufficient.

However for most Low-Income Families and Individuals who are just trying to make ends meet. Putting Money aside for savings is almost next to impossible. So how does a Low-Income family build a Savings Account. It is a simple solution, You pay yourself first, and then everything else comes after.

When it comes to money, you have to be selfish to a point. To be able to take care of ones self means at times making some hard choices. I will be the first to admit, it can be hard to put money into savings when there is a gas bill to be paid, or a cable bill, or an electric bill, or even a medical bill that needs to be paid.

The best way to figure out how much you can put into savings each pay period, is to figure out how much your take home pay is, and then figure out the average amount for all your bills for each month. This task will do two things, it will highlight were you might be able to cut back, and you will get a better over all picture of your financial standing. Once you have all of that figured out take 10% of your take home pay and see how that will affect your ability to get all the bills paid on time. If it has a negative affect then cut back to 5%, which should be a safe amount to put into savings.

Now if you are able to set up an automatic transfer each payday then do it. It will make putting that money into savings easier, and more then likely you won't even miss the money that has been put into savings.

One other thing you might want to do, is have a very strict rule of not touching your savings unless it is for an emergency, or if you have reached your goal amount for what ever item you have been saving up for. Although it is always a good idea just to keep that money right where it is 

Being Self-Sufficient isn't easy, however I find that when it is hard to do, it is that much more worth doing.

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