Don’t Be Last Getting Paid, Start Saving Money by Paying Yourself First

If you are like most American families living paycheck to paycheck and struggling to make ends meet, there are a few ways you can start saving money, even if it doesn’t seem like you have any money left to save. While these methods may seem like secrets, the truth is that people have been using them to save money for years, so now it is your turn to implement them in your own life.

Track Your Expenses

You have to create a budget for yourself and your household before you can even begin to think about saving money. We have all heard the “spend less than you make” rule before, but few people know how or where to start. You have to know how much money you are bringing in and where it is going. How else will you know where you can make cuts in your expenses and put the money elsewhere?

While you may be thinking that you don’t have the time or the discipline to track each penny and dollar you spend day in and day out, you should at least have a basic idea of how you spend your money. Make a list of all of your expenses including rent or mortgage, utilities, debt or credit card payments, groceries and any other bills for phones or car payments. Once you write down how much each bill requires every month, you can get a better understanding of where you are spending too much money.

The idea is to try to see the big picture and not focus on every dollar that you spend. By looking at your overall household expenses and breaking them down into categories, you will find that you may stick with your budget longer than someone who painstakingly monitors their money.

Pay Yourself First

This is one of the best ways to save money. Now that you have figured out which expenses you need to cut back on, you should have already started accumulating extra money. While some people immediately put this money into a savings account or a retirement plan, you should try paying yourself first.

If you are not familiar with this phrase, it is as simple as it sounds. When most people receive their paycheck, they deposit it into their bank right away. Once the check has cleared, the money is immediately put toward paying bills and buying groceries and gas for the week. In other words, you probably wait until all your expenses are taken care of before you decide how much you can set aside in your savings account. However, depending on how much you spend on bills and food, you may not have much money left over to put in the bank, and may hesitate to do so in fear that you may need those couple extra dollars over the next few days.

Meet Your Financial Obligations to Yourself

The most successful way you can overcome this way of thinking is to understand that your savings account is like a bill and should be treated as such. For example, when the time to pay rent comes around, you will write a check on the first of the month and make the payment without thinking twice about it. So, when you receive your paycheck, you should set aside a certain amount for savings and consider it another bill you are going to pay instead. You are more likely to put money in your savings account if you think this way.

Use These Tips and Tricks

You will help your chances even more if you set up an automatic withdrawal system from your bank into your savings account. This way, if you feel yourself wavering in your decision to save the money, it is already into your savings account before you can spend it. The amount you deposit is up to you and is based on your needs and budget, but most people start by depositing 10 percent of their paychecks.

Find out if your employer offers a direct deposit option or ask your bank if you can set up an automatic monthly transfer. You may even be able to deduct your savings right from your paycheck. Once you give your employer permission, they will take the money directly out of what they owe you and place it in the bank. It won’t even show up on your paycheck. Over the next few months, you will not even notice that your money is missing and you will begin saving money without even realizing it.

While most of us are well-aware of the fact that we need to begin budgeting to save money and stay out of debt, but many people still struggle because they can’t follow through with their plan. While you may be lucky one day and win the lottery, you stand a better chance of having money if you save it correctly.

Mallory Hall is a married mother of two blogging on family, financial and health topics. Visit her at Guru to if you'd like her to write for you.