The main reason? Out of sight out of mind. He doesn’t think of it and consequently has a balance in the “bank” of over $150 in a few months of savings (some birthday money thrown in there too).
This is a perfect lesson on how we ought to save. Set up the money to come out of your paycheck before you even see it, or at least have it transferred before you can spend it. This is the old “Pay yourself first’ mantra. When you do this, you are much less likely to miss the money you never had. If you try to wait until the end of the month and save what’s left, you’ll end up with lint from your pockets.
I use a similar strategy with pay raises. As active duty military, we usually get a small percentage pay raise each Jan 1st. I just bump up my TSP amount to coincide and I never see/miss the pay raise. Same thing on even year anniversaries of my active duty service, I get a small bump in pay, just save it ahead of time.
What strategies do you use to “pay yourself first”? Tell me in the comments.This entry was posted in Retirement Stuff by Rich