Why You Need To Be Paying Yourself First – GOBankingRates

Money / Financial Planning

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Whether your goal is to buy a car, pay for a wedding or boost your retirement nest egg, you need to be mindfully “paying yourself first” in order to achieve these goals. In today’s “Financially Savvy Female” column, we chat with Matthew Grishman, principal and wealth advisor at Gebhardt Group Inc., about what exactly this means and why all women should be doing this.

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What does it mean to pay yourself first?

Paying yourself first means recognizing that your most valuable asset, your best investment, your most precious financial resource is YOU.

It means knowing you are worth setting aside a pre-determined amount of each paycheck for, to invest in a way that makes you better, so that you are able to be the greatest version of yourself possible. This is absolutely the most critical step to creating wealth for yourself and your family — to set aside money to invest in you every month, before a single cent is spent on anyone or anything else.

We are all responsible for creating our own wealth. No one is going to do that for us (unless we are blessed with an inheritance of some sort). No stock investment or piece of real estate is going to do that for us (in most cases). We all have a unique ability, and it’s up to us to invest in ourselves.

Tips: 3 Money Moves Every Woman Must Make, According To Rachel Cruze

How can you figure out how much you can realistically set aside each month?

Deciding how much you can realistically save is completely up to you. It’s about shifting your mindset about what’s really important to you. If you believe you are your very best investment, then deciding to pay yourself first can be as easy as starting with 10% of your take-home pay.

Compare what’s left (90%) with your monthly expenses. First, break them down into two main categories: have to’s and want to’s. There are six primary have-to’s: roof over your head, food in your fridge, clothes on your back, communication, transportation and healthcare. Any expense that falls under these categories is considered a have-to expense. Everything else is a want-to expense.

Many people can find the 10% they need to begin paying themselves first by eliminating some of the want-to’s. But it really boils down to whether or not you believe paying yourself first is a have-to or a want-to. This becomes a much easier exercise if you resolve that paying yourself first is a have-to.

Helpful: Simple, …….