Stuart Smalley Says, “Pay Yourself First!”

September 25, 2007 · Filed Under · 1 Comment 

Stuart SmalleyTo coin Stuart Smalley, pay yourself first because your good enough, your smart enough, and doggone it, you deserve it. Before I had kids, I quickly racked up major credit card debt doing some pretty dumb things that mainly revolved around buying “stuff” that I thought I needed to be happy. Later, as I became responsible for somebody other than myself, I learned that true happiness came from not only providing for my family but insuring a financial future without debt and the worries that come along with it.

Pay Yourself First

I hear this advice all the time but it rarely has solid advice behind it. It typically sounds like Stuart Smalley, “Pay yourself first every month because you are neato, so doggone it, bury some cash in the backyard.”  OK, maybe that is a stretch, but you get my point. Instead, I would strongly suggest that you pay yourself a dollar amount every month that you are comfortable with. Pay yourself every month before you pay any other bill! For example, let’s say you decide to do $50 a month, commit to that amount for at least 1 year at the start. Invest that money in a savings account, open a mutual fund account at Vanguard, or a retirement account. Perhaps your employer has a 401k plan that they match. Just Do IT!

Think this is to hard to do, join the club. If after the first couple months you are having trouble paying yourself the $50, take a closer look at your lifestyle. Look at ways to reduce your monthly spending, $50 can be easily freed up if you avoid Starbucks, bring your lunch to work, avoid vending machines, or cancel that gym membership you rarely use and start jogging around your neighborhood. Be honest with yourself, and take a thorough look at your lifestyle, your financial future depends on it.

Let’s say you are 30 years old and are sincerely dedicated to paying yourself $50 a month. If you do this religiously every month until you are 55 years of age, your $15,000 will grow into a nest egg worth over $47,000 growing at a fairly conservative 8%. Just think if you could increase your payments to yourself as you scale back your spending and increase your salary. Doggone it, you deserve it!

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Comments

One Response to “Stuart Smalley Says, “Pay Yourself First!””

  1. hyperactive lu on September 26th, 2007 3:33 am

    Great ideas! We “pay ourselves” first and its a good feeling!

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