Ever hear “pay yourself first” as a strategy to save money?

I never understood that. How much was I supposed to pay myself? If I paid myself $50, did that mean I could spend the rest?

Here’s what I did instead:

1. First cover the “needs”: I figured out my monthly fixed expenses (rent, utilities, insurance, etc), and totaled them up. I then subtracted it from my monthly after-tax income. (In the beginning, this was depressing.)

The net balance became my available funds for discretionary purchases…my wants vs my needs.  I kept a monthly list of the wants I bought…just so I’d be more mindful of what I was spending my money on.  But my biggest want was to save as much money as I could because my anchor value is to be independent. I did this over the past 20 years. Slowly, the money grew.

The benefits I got from it?

1. When I spent money on a want, I really really wanted it.
2. I got used to always living on less than what I made.

Here’s the thing: when you do this as a way of life, it doesn’t feel intrusive, or depriving. It just feels like you’re being responsible.

Is it easy? No. Is it fun? No. Does it give you choices in the future? Absolutely.