Financial Competence: "Pay Yourself First"

[Cognition]

How many of you use the "Pay Yourself First" principle in your personal finances?

What is it, you ask? Pay yourself first is simply a principle of where you take a percentage (usually 10-15&#37 of your earnings (from any income) and "pay yourself" by depositing that amount into maybe a money-market account BEFORE ALL your other expenses.

Yes, paying yourself first before your expenses - no matter how much your expenses are.

Why do this? First of all, by paying yourself first, you establish a self-discipline of putting back money that can later be invested. Secondly, by doing this, your focus is now shifted on reducing expenses to make ends meet. Don't have enough to cover your expenses? That's the point! You put "pressure" or leverage on yourself.

Here's an article that does a better job of explaining this principle: http://beginnersinvest.about.com/cs/.../a/051701a.htm

-C.D. Allen

[syia]

I do..I always put 25% of any money I get inside my personal account

[Cognition]

^Awesome. Do you put it back before or after expenses?