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Make Your Money Work for You: Pay Yourself First
Posted By Tara Kuczykowski On October 24, 2008 @ 1:05 pm In living on less | 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!
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