by Dawn Hawkins

Created on: June 11, 2009

There is a personal finance rule of thumb that every person should adhere to. It is that you should always pay yourself first. That means before you pay your bills, go grocery shopping or buy any new gadgets. You should always put yourself first when you receive you paycheck but that doesn't mean to spend the money. It means to save it.

It is said that you should put a total of 10% of your gross income into a savings account each pay. This may be difficult for some people to pull of because many people live from paycheck to paycheck. It is important to find a way to cut expenses elsewhere so that you can create a nest egg for yourself. If you are one of the lucky few, you will never have to use that money until your retirement.

Here are the reasons that it is so important to put yourself first when it comes to savings:

Emergencies

Emergencies can put a major financial burden on you and your family. If you take ten percent of your pay each week and put it into a savings account, you will not have to worry about something happening and not having enough money to take care of things. Emergencies include things such as a death in the family, losing your job and health issues. These things can financially destroy you. Be prepared for something to happen even if it doesn't. These things take us by surprise. You never know when that cash can come in handy.

Retirement

When you are young, you think you have a long time before you have to worry about retirement. It is wise if you think about your retirement now though. The sooner you begin to plan for it, the better off you will be in the long run. Remember that when you get closer to retirement age and haven't set any money aside, you will be kicking yourself for it. It will mean that you will have to work longer or find ways to supplement your social security. When you want to retire but are forced to continue working, it takes away the joy of growing older.

The Things You Want

Chances are that you will at some time, want to make a rather large purchase. This can come in the form of a home or a car. If you want to buy such large items, you will need money in order to do it. You cannot receive a loan for the full amount for most huge purchases. You need a down payment. A house will require a larger down payment than a car, but both require a good deal of money. If you don't save and put yourself first, you will never be able to buy those things that you want in life.

Security

Having a savings account is vital to the way you feel. If you have an account with money in it, you will feel much more secure and worry less. That means that your stress level will be much lower than other people who have not taken the same steps. This also means that you won't have as many health problems because stress is often associated with deadly health problems.

It's Addicting

Watching your money grow is a wonderful addiction to acquire. The more you see in your account, the more you will want it to continue growing. Your goals will grow as well. You will spend less because you won't want to see your money dropping below a certain amount. You will become a frugal shopper, watching your dollars so that your money continues to grow.

Saving money and putting yourself first will make you feel much better as a person. It gives you the security of not having to worry as much about life's emergency situations. It ensures that you will be able to take care of yourself and your family if things get bad. It also allows you better manage your money in all areas of your life. Try it, you'll soon find yourself addicted to the feeling.

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