All the financial 'gurus' talk about 'paying yourself first', but how can you do that when you use all your money to pay off debt and just get by?
2007-01-09 08:54:52 · 6 answers · asked by dawn_duguay 2 in Business & Finance ➔ Credit
You are paying yourself first, in a way, by reducing your debt. You're clearing old bills and credit cards off, thereby improving your financial situation for the future. Pay debt first (don't incur any more though!), then start a savings program.
2007-01-09 09:03:25 · answer #1 · answered by Deborah C 5 · 2⤊ 0⤋
Part of getting into debt is living beyond our means. However, sometimes, it's because we did not save for an emergency. What "pay yourself first" means is don't neglect putting money into savings. Decide on 5% or 10% and the very first thing you do when you get paid is to but that money into a savings account that you DO NOT TOUCH. Then budget to live and pay down debt on the 95% or 90% that remains.
This becomes habit after you get out of debt and should stick with you the rest of you life. This way you build up a nest egg to protect against the kind of emergencies that could sent you into debt again.
2007-01-09 17:04:55 · answer #2 · answered by Elise K 6 · 2⤊ 0⤋
The best thing to do is get yourself $1000 that you set aside in savings first. Once you have that, focus on your debt. Once you pay off your debt you'll have plenty of time to pay yourself.
With that $1000 you have a little set aside in case you have an emergency while you're getting out of debt. Check out www.daveramsey.com and look at the Baby Steps under Useful Tools.
2007-01-09 18:35:25 · answer #3 · answered by Jen G 5 · 0⤊ 0⤋
I think they mean that you shouldn't skip buying food so that you can pay off your cable bill. Bill collectors like to threaten and push you around, but they are not very likely to take you to court - so make 'em wait. On the other hand, you need to take a look at what sort of behaviors you did to get into this fix in the first place. "Pay yourself first" doesn't mean go out and buy a plasma TV!
2007-01-09 17:04:18 · answer #4 · answered by Brad J 3 · 0⤊ 0⤋
You cannot. Pay off your debts and don't generate any new ones. Then you should have money to save.
2007-01-09 16:59:25 · answer #5 · answered by regerugged 7 · 0⤊ 0⤋
Debt? If you have credit cards then get rid of them. Just worry about paying your main bills to keep your phone lights and water on. If you have old bills, then forget 'em. It'll go off your credit in 7 years anyways.
2007-01-09 16:59:34 · answer #6 · answered by pro2call10 2 · 0⤊ 1⤋