by Steve20

Created on: November 12, 2009

Saving and Putting Yourself First

You may wonder where your money goes because it seems your income evaporates into the thin air. Sometimes you may feel like expenses, bills and debts are literally taking over your life.

To avoid such scenario it is important that you pay yourself first before spending your money on other things. By doing so, you begin to practice the art of self-discipline and creating your financial future without realizing.

Here are some ways to assist you:

-Save then spend. This is one of those savings approaches that you can easily employ. If you imagine yourself as a creditor, then you can make payments to our own account on a regular basis just as you do with bills before spending.

Set up an arbitrary savings amount and stash it in a savings account each month. You can start saving 10 per cent of your income every month and increase it gradually.

-Always reinvest interest or dividends earned by your investments, which may include Sacco savings, fixed deposits accounts or stocks. By reinvesting the earnings, your investment will continue growing and generating more.

-Exploit retirement accounts. The closest you can get to free money is when you build your savings in retirement accounts because they are exempt from tax up to a certain amount. If your employer matches retirement savings you have no reason not to be in the programme.

-By accelerating your mortgage payments you are reducing your debt by cutting interest payments as you will reduce the number of years you have to pay off the mortgage.

-If you don't have any debt, save the entire amount or invest it.

-Pretend you haven't paid your debts. After paying your debts, you may find yourself with extra money. This is a great opportunity to invest or save this "newly found" money.

-Finding other ways to supplement your income should help boost your savings. By increasing your income, but keeping your expenses the same lower, you have more money freed up for saving or investing.

-Avoid unnecessary purchases. Always say no to that person inside you saying you can't live without buying this or that because you will end up purchasing what you don't need.

-Pretend you don't get pay hikes. If you get a pay raise pretend that you didn't and continue living on your normal budget or cut your expenses. The extra cash can be used to boost your retirement account.

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