Published on January 26, 2022
Being financially prepared and being financially selfish are two very different things. But sometimes, it can be confusing.
The last time you were on an airplane, a flight attendant reminded you that in the case of an emergency you should always secure your own oxygen mask first before helping a child.
At first, it sounds selfish. Your first instinct is to help. But then you realize that if something happens to you, you will be unable to help. Then you see the wisdom in the words.
The same holds true for your finances.
As you set up your automatic monthly payments, remember to pay yourself first. That’s right, you need to be paid too. Not sometimes or if there’s any leftover at the end of the month — all the time.
That’s not selfish, it’s smart.
According to Investopedia, “paying yourself first is one of the pillars of personal finance and considered the golden rule by many financial planners.”
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.
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.
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 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.
A far cry from selfish.
The next time you think you’re being selfish for paying yourself, even if it means family fun night or date night with a loved one will have to wait till next week, remember what’s really important. You’ll have a savings account that’s ready to pay for a wedding, ready to replace the furnace, or ready for retirement.