- Take advantage of your employer’s 401(k), 403(b), 457 plans at work. You never miss what you never see! Contribute up to at least the amount of the company match (if they match). For example, if they match up to 5%, it’s like automatically losing a guaranteed 5% return on your money if don’t participate. Since this is pretax contributions, more money goes to you and less will be paid to the government. Take advantage, don’t allow FREE money stay left on the table!
- Do not make extra mortgage payments. This is always controversial! Instead of paying extra money to your mortgage company, you could be saving and investing it for yourself. Yes, I know the mortgage lender’s job is to inform us to pay extra payments to knock off the accumulated interest and payoff the home in a shorter period of years. Sounds good, right! Well, how about you saving/investing that money for yourself – just like the mortgage lender will be doing with your extra payments. Of course, they will never suggest to you to do that!
- Set up an automatic investment plan. Direct deposit is one way of ensuring you get your money safely into your account without worry. You can arrange to have as little as $50 a month deducted from your bank’s savings/checking/money market account and deposited into an account to buy mutual funds or stocks. This is an excellent way to build a small fortune over time.
- Pretend you didn’t get a raise or a tax return. I know this may sound a bit far fetched but can you imagine you opened an investment account and it automatically increased because you’ve included the exact percentage of a raise. How about deciding to also plop in your past 5 years of tax return payments into that same account without ever putting your hands on it. Can you imagine what that account may look like in 2, 5, 10 years? Think about it!
- Brown bag-it! You will be somewhat surprise how much money you can save by bringing in your lunch to work. It is not only cheaper, but healthier. I’m not saying you have to do this everyday but try possibly 2 days a week and see how it goes.
These are 5 simple ways to pay yourself first without dipping into your savings.