Managing your finances- Pay yourself

 

Still on managing finances, now you know your financial status which you learnt here, you have budgeted for and tracked your expenses which was discussed here, the final step is to pay yourself. Yes you heard right, pay yourself.

Always put finances aside that belong to you and you alone, have something to your name and improve your financial status. The finances you pay yourself is simply what you do not give to the fashion designer, the owner of the gas station, the shopping mall, the food stall, the hair dresser, and the list goes on. This is the portion of your finances that show that you actually make an income.

You will have nothing to show forth in the long run if all your income is spent on something.

What you do with your own portion of your finances is also important. You can decide to be conservative and keep your finances static in the bank, or where ever you feel is safe or you can invest and make it grow.

You would want to take caution with the type of investments you venture into because not only do some investments not increase your income or improve your financial status, they can actually erode your initial principal, capital or finance invested and leave you worse off.

You do not have to pay yourself so much if you cannot afford to but paying yourself as little as 10% of every income you make will make  a difference. Never say it is too small to set aside and end up spending it. Little drops of water make a mighty ocean.

One of the best ways to save effectively is by setting up a direct transfer with your bank to a separate bank account where you have little or no access to. Make this as practical as you can and see how much you have to your name in little or no time, watch your financial status increase.

These three simple and yet ignored practices of managing your finances, knowing your financial status, budgeting and tracking your expenses and paying yourself can help you improve your financial status and amass wealth.

Cheers,

Deo

Managing your finances- Pay yourself
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