American Finance Youtube Video Narration - Pay Yourself First Script
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EnglishVoice Age
Middle Aged (35-54)Accents
North American (General)Transcript
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earning money is only half the battle when it comes to finances. Having a plan in place to manage. Save an investor money once you have a balance in your bank account is critical to your long term financial well being, it doesn't have to be tough to create a budget. One of the most widely used ways is based on a simple principle. Pay yourself first. Pay yourself first is a term used in personal finance and retirement planning literature to describe the automatic routing of a specified saving contribution from each paycheck. At the moment it has received, it was a phrase that originally appeared in the book, the richest man in Babylon. However, robert Kiyosaki has turned a simple statement into a significant personal finance rules in his book, which that for dad, in which he explains the importance and value of paying yourself first. Most individuals spend their money and think, oh, I need to save but then forget about it at the end of the month and never actually save. As a result, we employ to pay yourself for a strategy that is you pay yourself first before you pay the light bill, your mortgage or your wardrobe. We'll be giving you information on how it works. The pros and cons, basic steps to take and some tips on keeping it long term. Let's get started how to spare yourself. First were at its most basic level that pay yourself first technique simply entails setting aside and saving a fixed amount of your paycheck each month before spending on anything else. In essence, it is the process of automating a saving approach or developing a savings plan paying yourself first, often known as reverse budgeting ensures that saving is not only accounted for early and reliably, but also becomes a priority. Your savings become a regular expense that you owe every month or paycheck since it is paid to you by you, here's an unedited version of the pay yourself. First concept. What we generally do is basically spend first and then balance whatever is left to our savings. What Kiyosaki is telling us is to do the opposite, which is first save and then let your savings take care of all expenses now that we got the basics covered. Here are steps that financial planners have recommended. Step one determine your multi income and expenses. The first step is to create a game plan which entails establishing a budget with the pay yourself first budget. You don't have to keep meticulous records of your income and expenses. You must however, construct a budget so that you can determine how much you can pay yourself begin by going over your bank and credit card statements and totalling your expenses to see how much additional money you have in your budget, compare these totals to your revenue paying yourself first does not imply that you ignore all of your other financial obligations in pursuit of your saving goals. Therefore you must account for them as well. We recommend going over your spending from the previous few months, itemizing it and calculating your average spending by category, starting with recurring an essential expenses such as rent or mortgage, food, minimum loan payments, medicine and bills can be beneficial. You'll be better equipped to determine how much you can afford to save. Once you've calculated the minimum amount you'll have to spend per month, Step two decide a good percentage to pay yourself. One of the first questions you may have when designing it. Pay yourself first budget is how much should I pay myself? Most experts advocate putting aside at least 20% of your monthly income. Let's pretend you earned $3,000 every month. A fair monthly savings goal would be $600 or 20% of your monthly income. If your minimum monthly expenses are $1,400, for example, saving $600 per month is well within your reach. It even leaves $1,000 extra dollars to spend or put towards other goals, such as paying off a home. But things aren't usually so simple in real life. It's fine if you're living paycheck to paycheck or if you only say 5% of your salary, it's better to save something than nothing at all, even if it's only a few dollars a month when your financial situation improves and you finally have the ability to save more money, even the simple habit of paying yourself first each month can pay off big time. Step three determine where you pay yourself first money is going. Once you've determined how much you'll pay yourself each month, it's time to determine where that money should be spent. It's a good idea to put it in your savings goals. Returning to the previous example, if you have $400 left over from your budget, you could put $200 into a retirement account, $100 into an emergency fund And $100 towards your credit card debt. It's entirely up to you how you spend the rest of your income. Look for ways to cut back on some purchases or lower your fixed expenses if you don't have enough money to satisfy all of your wants and needs each month. Such as moving to a cheaper apartment or negotiating bills. For example, also seek strategies to increase your earnings if you follow these procedures but still have a deficit. It may be time to scale down some of your savings and debt repayment goals until you have a budget that is balanced. Once your financial condition improves, you can recommit to those goals. Once this is set aside, you can now spend the rest of your money however you'd like perhaps the most significant advantage of pay yourself first budget is that you won't have to waste time or mental energy ensuring that you don't overspend in specific areas. You have complete discretion over how you spend the remainder of your salary. Step four, create a saving strategy. Put your plan into action. once you've sorted out all of the numbers, automating the transfer from your checking account to the right savings vehicle is one of the simplest methods to pay yourself every month. Set aside an hour or so after you've locked down your savings goals to set up automatic transfers to fund them, set up automatic transfers from your checking account to your savings account, Ira and other investment accounts when you get paid 401k. withdrawals can also be set up with your employer. It not only makes savings self regulating, but it also takes money out of your bank account before you can spend it. Some employers make depositing percentages off your check into various accounts. Simple if it isn't possible, these transactions can normally be set up through your bank. Now let's discuss some of the pros and cons of a pay yourself for his budget. Pros. Number one, low maintenance, you won't have to worry about overspending or housing or if it's right to indulge in movie theater popcorn. If you stick to pay yourself first budget. After you failed yourself first, you can spend the rest of your income however you like. Number two prioritizes savings First, a budget sole purpose is to assist you in achieving your savings objectives and living your best life with the pay yourself first budget, you can ensure that you meet your goals straightaway. Number three, automates your budget setting up automatic transfers for all your savings objectives. So money is taking out of your bank account. The second you get paid is one of the golden laws of pay yourself first budget. If it's out of sight, it's out of mind Collins Number one not ideal. If you're living paycheck to paycheck, you may not have enough wiggle room in your budget to pay yourself without going into debt or overdrawn your account. Consider starting with an envelope or zero based budget and then transitioning to a pay yourself first budget After you have some breathing room in your budget, Number two could lead to undisciplined spending. You may be missing out on opportunities to improve your spending and attain your savings objectives even faster if you pay yourself first and spend the rest as you choose. So, here are some key takeaways. Before we end this video. First, a pay yourself First, budget is one in which you first put money aside for your saving goals, Then use the rest of your income as you see fit second, because you don't have to log your expenses to pay yourself first, budget is easier than other types of budgets, you're fine as long as you're meeting your savings objectives and not taking on more debt. Third pay yourself first budget works best for people who have a good handle under spending and saving habits. If you are at risk of overdrawn your account or racking up credit card debt. It may be counterproductive