There have been times when it seemed my husband and I were working just to pay our expenses and nothing else. At the end of each pay period we were left with very little, and to be honest we felt defeated. The notion of paying ourselves wasn't something we had even considered; after all, where would the money come from anyway? This is how we found the extra money, and some of the ways we use that money.
Where we found the money to pay ourselves
I must admit I was skeptical that we would be able to reduce our spending enough to pay ourselves, but was surprised how easy it was. We did it by eliminating wasteful spending, limiting the number of times we eat out every month, and turning some basic tasks into do it yourself projects instead of paying someone else. Here are some examples of t he areas we made cuts.
- Wasteful spending: I was spending around $240 a year on dog toys alone. To save money we put a limit of $5 a month on dog toys, (not including special occasions) which reduced our spending by $180 a year.
- Eating out: It was very easy for us to spend $200 or more on eating out every month. Limiting the amount we spend to $20 per meal and reducing the number of times we order out four times a month, we save around $1,440 a year.
- DIY savings: I found doing something as simple as detailing our car at home can save money. It usually costs us $100 a visit to have it done professionally, so by putting this task on our DIY project list twice a year we save about $200.
Just these three changes alone saves us $1820 a year, all of which can be reallocated for things like paying ourselves.
What we do with our "pay"
For my husband and I, the phrase "paying yourself first" means finding ways to invest in our future and enjoy our money along the way. These are some of the way we've decided to spend our "pay."
- Creating an entertainment budget: I budget around $150 a month solely for entertainment purposes. The money is used for anything from a vacation to buying a new video game.
- Future savings: Putting money away for our future is extremely important to us, and I believe is one of the best ways to pay ourselves. The amount we put into our saving each month varies depending on a number of factors, but as long as we put something away, I'm happy.
- Fixing up our home: Our home is one of the biggest investments we will ever make. I know that every penny spent can only improve its value, and as a bonus it also helps us enjoy it.
I allow our circumstances guide how much "pay" we receive every month, so if we fall short of our goal it isn't the end of the world. The most important thing I've learned is that paying yourself and enjoying your money is as important and covering your other monthly expenses.
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- Banking & Budgeting
- Personal Budgeting