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Golden Rule of Savings: Make Yourself a Priority

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Published on August 30, 2021
 

Like a lot of things these days, paying bills has gone digital. You likely have your cable bill set up as an automatic payment on its due date. The same likely holds true for your electric and gas bills, credit cards, car payment, mortgage, and everything in between.

You don’t even have to think about it anymore. Bills just get paid.

As you set up your automatic payments, remember to add one more: yourself. That’s right, you need to be paid too. Not sometimes or when it’s convenient — all the time.

According to Investopedia, “paying yourself first is one of the pillars of personal finance and considered the golden rule by many financial planners.”

If you leave “extra” money in your checking account, you’ll likely spend it frivolously — there’s that new pair of shoes that you really don’t need or that extra night out at a restaurant. Many people fall into the trap of thinking, “my bills are paid, time to splurge.” That’s fine, as long as all your bills are paid, including the payment to yourself.

So, what does “pay yourself first” mean?

Basically, it means just like all your other monthly bills, set some money aside to pay yourself. Set up a recurring payment so you don’t forget.

Women smiling

It’s easy, really.

The easiest way to schedule a payment is to log into e-Banking and from the Menu, click on Move Money and then Transfer Between Accounts. From there, you can choose when and how often you want to automatically transfer funds. Each paycheck. Each month. Whatever fits your lifestyle.

Here’s an idea. In your Choice Savings Account, set up some Choice Goals, give them a unique name such as Vacation or Emergency Fund, and then transfer your desired amount into one, or several, accounts. Set aside as much as you can and for whatever reason you like. How about Tigers Tickets for your yearly trek to Comerica Park on opening day. Even if you’re on a tight budget, you can still enjoy some guilt-free extracurriculars because you’ve saved for them.

Creating Choice Goals is Easy.

There’s no minimum balance and you can access money in the account at any time! Plus, the balance in the account will also be included with all your savings balances to make sure you earn our best rate. Add a new goal account by clicking Menu, Open & Apply, then Open a New Account. From there, select Savings as the Share Type and Choice Goals for the share, follow the prompts and you’re set. If you want to create a nickname for this account, locate it among your accounts, then click the three dots on the right; tap Nickname, type the name, and click Save.

You’ll never see the money in your checking account, so you’ll never really miss it or whittle it away on morning coffee.

Make yourself a priority.

The best part about setting up an automatic transfer is that you’re making yourself a priority, just like the cable company or your cell phone. Think of yourself as a bill that must be paid. As your finances change, especially as you make more money as your career grows or if you receive a year-end bonus or tax refund, make sure you increase the payment you’re making to yourself or at minimum, add a portion of your “extra” money to your savings. It’s a guaranteed way to grow your personal wealth as your life changes.

You don’t have any ‘extra’ at the end of the month.

If you find yourself thinking that you just don’t have anything left over, take a look at your spending habits and see if you can free up some money.

For instance:

  • If you cut out that $3 cup of coffee on your way to work each day: $15 per week and $60 per month in savings. Do you know what that totals a year? $720. A lot.

  • You have three streaming services plus premium cable channels. Get rid of one channel and one service. That could save you up to $30 per month. Or, $360 a year.

These are just two simple ways to save money each month that doesn’t really influence your lifestyle. It might not seem like much when you spend the money mindlessly, but you’ll feel differently when you start to see how quickly your savings balance increases with small, consistent deposits.

In most circumstances, the money is there, you just have to find it. You can easily make your own coffee and find something to watch on a different streaming app.

Self-care is a hot topic these days. We’re more aware then ever of the important role it plays in all other areas of our lives. When you think of your own self-care routine, be sure to create a habit of paying yourself first. Be selfish about saving for your goals and preparing for your future. Your future self will thank you!

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