The Road to Prosperity: Step 3 Pay Yourself

It’s not a secret, nor is it a new concept, but it is worth repeating, and it is extremely important if you ever want to build wealth and prosperity. After accepting responsibility for your future, tracking and budgeting your spending, the next logical step is to ensure that you treat yourself as an item on your budget. One of my clients asked me how do I pay myself??? Trying to keep things simple I said, treat yourself like a bill. You pay Hydro, Gas, Mortgage, so why not pay yourself. She immediately got the concept. She slotted “Savings” into her spreadsheet and began slowly putting away money each paycheque and was surprised how fast it started to add up.

Now there are different schools of thought on the order and importance savings plays in your budget so I will give you my view based on my own personal experience. During my crunch years (raising kids, paying the mortgage, high household debt) I made it a priority to pay my loans and mortgage off as quickly as I could. This meant that I put very little aside into savings, but still managed to save something each time. My reasoning was simple. I was going to get rid of the debt sooner and sacrifice now (social life, travel, entertainment) while the kids were young so I could enjoy life later. Some may opt to have a more balanced approach, while others are able to both save and pay off debt successfully at the same time. Whatever method you choose, so long as you remember to keep something aside for yourselves then things will work out. If you’re not saving, then ask yourself this question, “What do I have to show for all my hard work?”

Until next time.

Take Care.

Rick Barbosa

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rickbarbosa

Our Senior Partner Rick Barbosa is a Professional Accountant and Personal Financial Advisor with over 20 years experience dealing with Large Fortune 500 Organizations and Small to Medium sized Family owned Businesses. If you're looking for help with your finances, taxes, investing or starting and managing a business you've come to the right person.

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