Counting Pennies

You’ve heard this before: pay yourself before you pay anybody else. But do you actually do it? Not sometimes and not when you have a cash windfall, but every month (or every time your salary comes in), on a regular basis. “Treat savings as self-billing and it’ll be done easily,” says consumer finance expert Ethan Ewing, president of Bills.com. “In a short period of time, most people get used to it and don’t even realize they are saving.” If you have trouble putting money away, ask your bank or financial institution if they offer automatic withdrawal. The system allows you to designate a quantity that gets automatically taken from each deposit you make and put away into a separate savings account.

When it comes to saving, some of us have a hard time accepting the concept of putting money aside when there are bills to pay and food to be bought. The secret is to record the savings as one more expense or bill. “If necessary, start with a small amount like $25 or $50 per month and increase it whenever possible,” says Ewing.  

The secret to saving money is on paying yourself even if you think you can’t afford to (or maybe especially if you can’t afford to). As time goes by, the concept of putting yourself first will make it clear how important your financial security is and you will be more likely to avoid overspending.

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