How To Manage Your Money? PAY YOURSELF FIRST
Hello everybody, it’s Kev here from LifeSuccessEngineer.com and in this video I’m going to tell you to pay yourself first and how to manage your money.
Now, you might immediately be thinking, who the hell are you to tell me how to manage your money and who are you to tell me to pay myself first?! Just hear me out a second. I went to the Millionaire Mind intensive seminar in October 2016 and it was a powerful, powerful seminar.
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The first thing they spoke about was your money mindset. Your psychology around money and immediately, they said who here pays themselves first? Everybody thought “what the hell are they talking about?”
They said, who pays all their rent, mortgage, expenses, phone bills and their utility bills immediately on the first day of the month? Everybody put their hands up and they said well, wouldn’t it be great to pay yourself first?
Why are you scraping out the crap at the bottom of the barrel, which may be just pocket change when it’s your money? When you have worked your ass off for that money, you spend hours upon hours every week working for somebody else or working for yourself and then you pay every man and the dog first, the taxman, the bill man, the grocery man, the milkman – you’ll pay everybody else first, then you scrape all the crap at the bottom.
How great would it be to first pay yourself? This would be great, because the majority of people are always paying other people first. So let’s flip the script for a second. How about you take 10% of your income and you put it into a financial freedom account? So you put it into an account that is yours forever and you never let go of that money. That sounds good, right? That sounds different, because we’re always used to paying everybody else first.
Let’s say I’ve got $2000 a month, I’m going to take $200 and that is mine – that is my financial freedom. Nobody is ever going to touch that money. How about you then put 10% into a long-term savings account? That sounds great as well. So that’s 80% left, when a lot of people are immediately going “hang on a minute, my expenses are a bit too high for this”, but how great would that be, to have 10% in a long term savings account?
Now, you may be asking what that is and what the difference is. Well, your FFA (financial freedom account) – never spend that money. Over time, that is going to make you rich! The long-term savings account (LTSA), that is going to be the big things you want throughout the year, maybe your holidays, your cars or your laptop.
Then, you might be thinking about what you can and can’t afford. It’s all well and good having those credit card balances and overdrafts but let’s think about what you can actually afford. Well, how about you put 10% in an education account?
An education account is an account where you will look to purchase things that are going to improve you and your life in some way. Now, this may not be for everybody, but if you are into self-development or in the process of improving yourself, whether that is reading books or going through training programmes or educating yourself in other ways, whether it’s online programmes, learning new languages – how great would it be to have an account dedicated directly to make your life better?
To me, that sounds great. So that’s 30% gone; you’ve got your financial freedom, your long-term savings, and your education. Everything is all to do with you, you are paying yourself first.
Now, this sounds amazing, too good to be true I thought. Then he says well, how about you then take another 10% and you split that up into 5% play; everybody likes to play, who doesn’t want to play, go and enjoy yourself? Let’s go and enjoy – purchase the things you want to purchase there and then.
You get paid, you want to purchase things there and then. New jeans, new console, I want a new pair of shoes, whatever it is, pay yourself 5% to go treat yourself. Play hard, go with your friends, go have a drink, go for a meal. Then how about another 5% to contribution? To other people, to people that need it more than you?
Now, that’s 40% of your income gone on yourself first. Yes, 5% might be contribution but I highly recommend it. Personally, I’ve got two contributions and it’s a brilliant way to make yourself feel fulfilled and like you are making a difference in people’s lives.
Then you’ve got 60% left. What is that for? That is now your necessity account. That is your expenses, that is your rent, your food, your bills, your utilities. Now, immediately I know what you’re saying, if only your bills were at 60%, if only it was that easy. I understand that, but let’s flip the mindset a second, because as soon as I started thinking differently, it made a big impact in my life because I started to think I need to pay myself first, and if you’re an entrepreneur thinking about this, you may struggle with this like I have done. You want to pay everybody, you want to make things work and you’ll rather starve yourself than anybody else but let’s get into the mindset of paying yourself first, be selfish first. Think about your financial freedom, your long-term savings, your education, your play. Go out and spend money!
No matter what money personality you are, whether you’re a spender, a saver or you ignore anything to do with money – there are people out there who will just ignore anything to do with money, and believe it or not there’s even “money monks”, people to whom money is beneath them, they don’t even think about money. I’ve met a person like that, believe it or not.
So pay yourself first guys, and manage your money first because once you do, your life will change.
Be selfish for a second, Imagine paying yourself first; just forget about everybody for a second. Be selfish, you work hard for your money, enjoy it!
Thank you very much guys, I hope you enjoyed that one! Just a quick little rant about paying yourself first and managing your money, it’s really important that you do and get your JARS system and accounts set up and you automatically pay yourself first and everybody else last. You might be thinking, I can’t afford 60%, my expenses are 95% or 110%. Well, then you might have to look at yourself and you might have to potentially downgrade a little bit to bring your lifestyle into actual alignment to what you’ve got.
This has been Kev from LiveSuccessEngineer.com, thank you very much.
So how to manage your money and paying yourself first? What do you think? Comment below and let me know 🙂
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