Pay yourself first is the quintessential personal finance concept. Almost every personal finance book that I've read includes some version of the pay yourself first method. However since Slap My Wallet is not blog for people who spend their weekends reading personal finance books I will tell you about pay yourself first concept in a nutshell.
This is a method of banking that my wife and I came up with before we got married and decided to join our finances. It's a very simple trick that we invented. Alright maybe other people have done it as well, but we're staking claim.
The Problem
First let me explain the problem. We realized that joining our finances could be a recipe for disaster. We'd have two salaries directly depositing into our checking account. We'd also have money coming in and out for wedding expenses from savings accounts and parents. Plus we'd have money going out for rent, student loans, debt, utilities, bills and daily expenses. We understood that it would be very easy for either of us to misread our balance and overdraw the account.
I Want Things
The guitar store is one of my favorite places. I enjoy pulling down some expensive relic off the wall so that I can examine it more closely. "It must be fate that brought me here", I say to myself. I determine that I need the guitar, and it never takes me too long to conjure up ways to make my purchase. I hear a nice pair of Manolo Blahniks has the same effect on some women.
We all want things-shiny things, soft things, handmade things. In fact I want lots of things. In a way our desire is good because it can motivate us to work harder. However if we want to achieve our life goals, which could be paying off debt, owning a house or even traveling the world, we need to learn how to save money and control our spending.
