How many times have you vowed that you will stop spending money on things that you don’t need? Or how many times have you promised yourself you will start investing your money? No matter how many times you’ve promised yourself that you will change your financial habits (or how well you’ve kept those promises), the time to start creating your wealth is now.
We all know that the basic math behind wealth is about spending less and investing more. The problem is that most of us lack the discipline or focus to really live this formula. The good news is that you can create that kind of financial discipline in your life with one simple principle:
Pay yourself first!
No matter how much money you make or how many bills you have, the simple way to have some money to invest is to pay yourself (or your investment fund) ahead of anything else you do. Take 10% of your income and put it into your investment account (whether that’s a savings, money market or brokerage account-and if you don’t have one, get one!). Don’t pay any bills or spend any other money until you’ve first paid yourself. When that’s done, then put your attention on paying everyone else. One more thing.don’t touch that account except to invest it. NEVER use it to pay bills.
Why does this principle work? Because it forces you to live on less while saving more. By paying yourself first, you put your wealth, which comes from investment, first. It then puts all your other spending at a lower priority. You will be forced to figure out how to live on what’s left over.
Now if you really want to develop your wealth, add one more thing to the formula:
Pay your Source first, then pay yourself.
We are talking about tithing, or giving the first 10% of your income to a good cause. If you work on tithing 10% to a good cause (in recognition of your Source of wealth) and then paying yourself 10%, you’ll be surprised how fast your wealth will grow, and how quickly you can learn to live on less. If you want to start with a more moderate approach, try 5% tithing and 5% paying yourself, then work yourself up to the full 10% formula. When you put your Source and your own wealth first, you will quickly attract more wealth into your life-plus, by paying yourself first, you’ll be able to hold onto it!