Living paycheck to paycheck sucks, but for millions of folks, or even billions, it's their world.
You budget. You cut off unnecessary expenses. You've even considered moving back home with mom and dad. All in the hopes of saving the almighty dollar.
Only to wind up still feeling like you're lacking in the financial intelligence department.
And that's nothing to be ashamed of. Hell, most of us are.
And contrary to popular belief, a better paying job is not always the solution. Yeah, you're far more disciplined with money than you were in your teens or 20s, (right???) but more money could equate to more expenses (taxes, credit cards, loans, etc.) faster than you realize.
And then you find yourself back at the start of the rat race once again.
So how do you beat the rat race? How do you reward yourself with something, anything, instead of giving 80% of your paycheck to "the man?"
I know I'm a late bloomer with this but Robert Kiyosaki's Rich Dad, Poor Dad, was an eye opener for me.
Yeah, I know; I'm just NOW reading that book! But I know I'm not the only one catching the bus late!
I was encouraged to read it after sitting through one of those financial MLM presentations with a girlfriend (I didn't sign up for anything, by the way).
My. Kiyosaki mentioned something in the book that I've heard before but never applied it because it simply did not come off as practical for a single mom of two. Yeah, I got plenty of information on saving and having multiple sources of income but there was something else very simple that I'll always remember from that book.
So, what did he recommend that I found so enlightening? A very simple concept you've heard before but probably don't do or don't do often.
It's called paying yourself first before all other bills. I call this bill "The Bank of YOU."
You're probably thinking, pay me first? I can barely pay the gas bill let alone myself! What's this chic smoking?!
I get it but hear me out, okay?
You're already cranking out 50%-90% of your paycheck to bills, yes? You're already spent years, probably decades, paying "the man" for your hard work. You may have a 401k, pension, 529s for the kids (or grandkids), IRAs, or an emergency stash of cash but those pockets of money are not designed to be touched on a typical basis.
Decide on an amount that you're comfortable with every month that'll still allow you to meet other financial obligations, and pay that Bank of YOU bill first.
Yes. Every paycheck. Every time.
I recently did this for the first time in my 32 years and WOW. It felt so rewarding. Because I'm a single mom, I often don't have time to think about me. Holidays, vacations, budgeting, and real estate is all based on the needs of my kids first.
Such is my life.
But I hauled $100 into my savings immediately when I got paid this past Friday. I smiled to myself and gave "the man" the finger. I felt no shame either. I felt comfortable with that amount. I knew it was what I deserved, dammit!
And I don't care if it's $5; if that's the only amount you can truly afford to pay The Bank of YOU, do it. Before all other bills, this one should be paid first.
Why? Because you deserve it. You deserve to keep every benefit you can from working so hard. You deserve to watch your money grow and work for you instead of going to bills, month after month, year after year.
And quite frankly, working paycheck to paycheck truly feels like you're working for nothing. You can't save worth a damn, cable bills increase every year, health insurance premiums increase yearly; however, your raises don't. Your bonuses don't. And people wonder why 19-20 million people are depressed!
Something's gotta give, right?
And there are benefits to paying yourself first. Let's explore what I believe are some major advantages to paying The Bank of YOU first, every time.
The Bank of YOU forces you to budget.
This is a bill, you realize that right? But it's a good bill because it's completely dictated by...well...you! You decide what to pay yourself, when, where and why.
It's nice to know you have that type of control over your money when living in this glorious thing called the Rat Race. And because The Bank of YOU is so important, it makes you want to put more in it. How do you do that?
The first thing I did after paying myself was consider what other unnecessary expenses I could shave so I can give The Bank of ME more money. I was so moved by the paying me first concept that I went to the grocery store yesterday and purchased enough to cook tonight and make left overs for the rest of the week, all in hopes of saving more for The Bank of ME.
I even chatted with another single mom girlfriend of mine about moving in together to cut expenses for both of our families.
The idea didn't work out to well but The Bank of ME definitely has put me in budgeting mode!
The Bank of YOU helps you realize more money doesn't always fix things.
When most people get more money, they'll likely blow it on BS. Even if they have a budget in hand, it'll still be very tempting to blow that new dough. Money management is just that: management.
Would you let your babies go without food or clothes? Of course not! Would you let your Bank of YOU go barren and dry? Let's hope not!
Your Bank of YOU has to be that precious to you. Every waking moment, you want to think about ways to pay that bill as often as you can, not just during payday.
And when you're able to see the various ways you can save for that bill (shopping at thrifts stores, accepting hand-me-downs with a Colgate smile, coupon-ing the hell out of your groceries, etc.) you'll notice you make more than enough.
It may not feel so paycheck-ish to paycheck-ish after all!
I certainly am not discouraging a better job with better pay. In the case of The Bank of YOU, more is more! But I'm simply recommending that you have a mindset of frugality and conservation NOW so that when you're blessed with that new job or that bonus or raise, you'll know where that extra money should go.
The Bank of YOU encourages entrepreneurship.
While I'm grateful to have a well paying job as the only bread winner in my family, life could always be better.
And while a better paying job could change a lot in my life for the better, the sound of kicking "the man" out of my life and working for myself sounds all kinds of sexy!
The Bank of YOU encourages you to be your own boss and find additional sources of income to pay that bill.
In Mr. Kiyosaki's book, he encourages financial intelligence, especially in the realm of real estate. But many people don't have a rich or poor dad (or any dad) so self-education in investing, finance, and multiple sources of income is crucial in paying your Bank of YOU bill.
For example, I'm using my passion as a writer to not only create compelling and moving content for you, dear reader, but it's also a small income! I can make anywhere from $50 or more just in writing blogs. A blog a day, in one month, could be an extra $1000 or more for me!
I'll give that a "YEAHHHH" in my best Lil' Jon voice!
So give it a try.
Next paycheck that comes around, think of a comfortable figure and pay your Bank of YOU. Put it way in a separate account if you need to. Pay that bill as often as you comfortably can and add as much as you can.
Before you know it, you have hundreds of thousands in cushion money.
So slowly ween yourself off your rat race wheel and start making YOU a financial priority!