Print This Post

Make Your Money Work for You: Pay Yourself First

by Tara Kuczykowski on October 24, 2008 · 14 comments

For Money-Making Week we've been talking about ways you can earn money from home. So far we've covered taking surveys, general transcription, and using affiliate links to monetize your blog. Now make your extra income work harder for you.

According to Redbook magazine, a recent study by VISA found that nearly half of all Americans lose track of an average of $45 a week. Those afternoon vending machine trips and spontaneous magazine purchases that you grabbed while waiting to check out really add up!

What would happen if instead you tossed an inexpensive (and probably healthier) snack in your purse each morning and used that money to pay yourself instead?

Pay yourself first! It really is just that simple. Set a target amount that you will pay yourself each week, and set up an automatic transfer that will deduct that amount from your checking account directly into a high-interest savings account. I guarantee after a few weeks you won't even miss it.  Using this method our family was able to completely fund our Myrtle Beach vacation over the summer even as my husband was laid off for four months.

They key to making this work for me is to put it in an online account that I don't have immediate access to. This forces me to think carefully about any withdrawals I make and consider if they are a true necessity. It takes 3-5 business days to have the money transferred back to my checking account, so I can't withdraw money for a spur of the moment purchase.

Up until recently I was using ING Direct for this purpose. However, I recently discovered that FNBO Direct has a 2.15% interest rate, as compared to only 1.10% with ING Direct. While this is a small difference, as a Deal Seeking Mom, I’m never satisfied unless I get the most for my money, so I switched banks.

Opening my account was very easy. FNBO offers no monthly fees, no minimum balance, and you can open your account with as little as $1. I recommend that you select no when asked if you want an ATM card to make it harder to withdraw money on a whim. Or as an alternative you could use the tried and true method of freezing it in a block of ice. The process was quick and painless, and I’ve been very satisfied with my online savings account thus far.

You work hard for your money, so why shouldn’t your money work hard for you as well?

Do you pay yourself first?  Why or why not?  Even $5 a week is a good start and you can increase it as you're able.  The interest earnings are just an added bonus!

{ 14 comments… read them below or add one }

1 gina October 24, 2008 at 6:33 pm

What a great idea! As if we could EVER earn what a SAHM is worth LOL. I just did a post on budgeting today which ties right in with this. Great minds think alike I guess :)

Love your site. Keep up the great work!

gina´s last blog post..Another Freebie

Reply

2 gina October 24, 2008 at 2:33 pm

What a great idea! As if we could EVER earn what a SAHM is worth LOL. I just did a post on budgeting today which ties right in with this. Great minds think alike I guess :)

Love your site. Keep up the great work!

gina´s last blog post..Another Freebie

Reply

3 Andrea @ Mommy Snacks October 24, 2008 at 7:29 pm

Tara - I'm lovin' this series!!

Yes, I do pay myself first. I actually set up a checking account that I got paid to open. Then opened up a savings with that bank that I got paid to open. So, paying myself has paid me even more!

The interest rate on the FNBO is great too! Thanks for sharing.

Andrea @ Mommy Snacks´s last blog post..Shopping with Coupons: Plan your Purchases

Reply

4 Andrea @ Mommy Snacks October 24, 2008 at 3:29 pm

Tara - I'm lovin' this series!!

Yes, I do pay myself first. I actually set up a checking account that I got paid to open. Then opened up a savings with that bank that I got paid to open. So, paying myself has paid me even more!

The interest rate on the FNBO is great too! Thanks for sharing.

Andrea @ Mommy Snacks´s last blog post..Shopping with Coupons: Plan your Purchases

Reply

5 Sandy Hipple October 24, 2008 at 7:47 pm

OMG.....this is great. This is just what I have been working on lately. Paying myself first. Thanks for the info.

Reply

6 Sandy Hipple October 24, 2008 at 3:47 pm

OMG.....this is great. This is just what I have been working on lately. Paying myself first. Thanks for the info.

Reply

7 Laura K October 24, 2008 at 7:56 pm

I have an FNBO Direct account for my emergency fund, and it's great because I never touch it. I didn't know they offered an ATM card - probably a good thing! I also didn't know they dropped their rate from 3.5% to 3.255 - thanks for the info!

Laura K´s last blog post..

Reply

8 Laura K October 24, 2008 at 3:56 pm

I have an FNBO Direct account for my emergency fund, and it's great because I never touch it. I didn't know they offered an ATM card - probably a good thing! I also didn't know they dropped their rate from 3.5% to 3.255 - thanks for the info!

Laura K´s last blog post..

Reply

9 Sandy Hipple October 24, 2008 at 10:13 pm

I put the wrong link. I can't wait to look at the FNBO site.

Sandy Hipple´s last blog post..Why I hate medical billers

Reply

10 Sandy Hipple October 24, 2008 at 10:13 pm

I put the wrong link. I can't wait to look at the FNBO site.

Sandy Hipple´s last blog post..Why I hate medical billers

Reply

11 Sandy Hipple October 24, 2008 at 6:13 pm

I put the wrong link. I can't wait to look at the FNBO site.

Sandy Hipple´s last blog post..Why I hate medical billers

Reply

12 Brandice Senecal November 19, 2008 at 7:19 pm

you know, i can transfer money to our savings account online. It never occurred to me how fast $5 would add up. It's better than nothing!
Thanks for an important reminder!

Brandice Senecal´s last blog post..

Reply

13 Brandice Senecal November 19, 2008 at 7:19 pm

you know, i can transfer money to our savings account online. It never occurred to me how fast $5 would add up. It's better than nothing!
Thanks for an important reminder!

Brandice Senecal´s last blog post..

Reply

14 Brandice Senecal November 19, 2008 at 2:19 pm

you know, i can transfer money to our savings account online. It never occurred to me how fast $5 would add up. It's better than nothing!
Thanks for an important reminder!

Brandice Senecal´s last blog post..

Reply

Leave a Comment

You can use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>


Previous post:

Next post: