Discipline and a Savings Account-Pay Yourself First
Andrew Carnegie states one of the main ingredients for success is the ability to save money. The rule is pay yourself first. If at all possible within your budget, you should take ten percent from each paycheck and put it into a savings account. Do not concern with the interest rate. This money can be moved to a much better earning position when it has accumulated sufficiently.
When I explain this to a few people, their normal reaction was the bank only pays about two percent; it’s not worth it. Yet they will extend their credit cards and pay up to 80% of they monthly payments in interest. Paying yourself first and saving it becomes a lifestyle. It also is a mental behavior.
You can Never Really be Broke if You Have a Savings Account
I could never understand why the banking industry doesn’t run with this concept. By paying yourself back ten percent of your earnings, you will have to live on a budget of the other 90 percent. As long as you have the means and discipline to do this, you will accomplish two things. First, you save money and second, you have your money work for you.
You will be surprised at how many opportunities will present themselves when you have some money in the bank. To me, there are 3 steps to financial freedom.
- Reduce or eliminate the negative flow of your money such as excessive loan interest, impulse buying, and the most serious, addictions.
- Live within your budget. The way to get more is to be happy with what you have.
- Have your money make money. You can’t do this without disposable income. Using a savings account strategy is one of the easiest ways to build wealth. A very good book I suggest is “The Richest Man in Babylon“, by George S. Clason.
Open a savings account today. This payday, put ten percent into this account. Continue doing this and you will succeed. Don’t do this and you may never learn how to manage money.
Article is an excerpt from the book Success and Happiness-One Day at a Time by guest author Leonard Rubino. Leonard’s book is a great read and can be found on Amazon.