Does this question sound crazy? Last week of every month, do you realize your wallet is slim and you are managing expenses thro’ credit card or other means to patch up. Do you know, why this is happening?
Whether you have just started your career or hold the top most senior position in your profession or run your own business, Are you taking enough care of yourself and your beloved ones?
Basic idea for everyone, when comes to managing money, is to make a plan for all the expenses first and save the rest.
After all expenses, Is there anything really left out at the month end, for savings? Wonder how one would manage the last week of the month, if there are no credit cards!
Does this attitude really work for meeting our future expenses, Meeting future goals, emergency expenses, meeting your retirement expense. The truth is a big, NO!
So, what do you do? Here is an answer. Make a mindset to start allocating a minimum percentage of your monthly salary (say 10%) as PAY YOURSELF FIRST (PYF) and manage the monthly expense with remaining 90% amount. Make sure that you don’t touch your PYF at any cost or scenario.
Every month you make sure that you keep aside PYF and you see there is a small corpus growing without your knowledge and by this time I am sure that you could manage your expenses in balance 90% amount comfortably. At the end of 10months, you will be having a wholesome of your one month gross in your wallet. That’s amazing isn’t it.
Simple Tip: Suggest to start a monthly online Recurring Deposit (linked to your salary account), with amount equivalent to 10% of your monthly salary, with term period of 12 months . You get an average return of one month deposit amount as interest in general. Wow thats an added bonus to PYF, if automated through term RD. Isn’t it Awesome. Continue the same for the rest of the years you would like, until you reach your target fund in PYF bucket.
How will you feel now? Wow you can be a lender instead of a borrower from then on!
This PYF has been clearly explained in the book by George S Clason, The Richest Man in Babylon. An average guy in schooling, turned out to be Richest man in Babylon following a very basic simple concept, which is PAY YOURSELF FIRST.
3 important benefits of adopting PYF saving method:
1) Missed investment opportunities due to lack of initial principal requirement.
2) Managing your unplanned expense (normally you manage thro credit cards/borrow from friends)
3) PYF fund comes as a rescue in an emergency Crisis
All the best for you to follow the above simple, successful real formulae to manage your wallet healthy and wealthy. And a worry free mind