Financial Tip – Pay Yourself First

We asked for your “financial resolutions” – and you delivered!  We’ll be sharing your ideas throughout the year starting with a great one . . . “pay myself first.”

But what does that mean?

Everyone looks forward to payday, but shortly after your direct deposit hits your bank account, the money starts flowing right back out. A great way to make sure you are saving money is to pay yourself first by allotting a portion of your paycheck to your savings account. Here are some tips on how to do so.

1. Set some goals. Write down where you are now and where you want to be in six months. Ask a friend or partner to be your accountability buddy and check in regularly. You’d be surprised what you can accomplish if you just write it down first.

2. Name your savings account. In Online Banking, set your account name to a simple title like “vacation,” “holiday expenses,” “new car” to keep you motivated.

3. Automate it. Saving can be as easy as setting up an auto payment into a savings account. Ask your HR department to send part of your direct deposit to a different account or set up automatic transfers in Online Banking. That way, when your paycheck hits your account, you would actually have to take more steps to spend it rather than saving it. You’ll also get used to only being able to spend what you can truly afford to spend.

4.   Start small and increase slowly. Starting with a large amount could be jarring, so start with a small number that is comfortable but still gets you to your goals. Once your savings grows a bit, reevaluate your plan and consider saving more each month.

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