Paying Yourself First
Last week I wrote about the importance of direct deposit and this past week I got a good firsthand experience on why paying yourself first is so important. In case you haven’t heard this phrase before (in which case, welcome to the computer age), the idea is that saving and preparing for retirement is much easier when you get all that money taken out of your paycheck before you even get it into your hands/bank account. Direct deposit is a key part of this strategy and it makes it much easier to make your saving and budgeting automatic.
Anyway, last week I got my first paycheck with my new job and there were a few things different about it (other than it being bigger than it used to, which is very nice). First of all, I’m not enrolled in my 401(k) until next month, so that money (which I’ve bumped from 4% at my old job to 8% here) was not taken out—which means more money in my account.
The other big difference is that, since it’s my first paycheck, they gave me a live check instead of depositing into my account, which means I didn’t enjoy the benefits of direct deposit AND I had way more money than I will normally get (way more than my handy paycheck calculator estimated)
Not a good combination, even for someone who prouds himself on his frugality and saving prowess.
Because of a combination of factors (Valentine’s Day, our anniversary, paying for parking in our building, and buying new clothes for my new job), my budget got rocked this month. That means that, instead of saving a whole bunch of money (which I expected when I calculated what I would be making), I won’t be saving much this month. The good thing is I probably won’t be dipping into my savings, which I thought might happen with the clothes shopping I had to do.
I can’t wait to get my first direct deposit paycheck though, and then I can go back to putting my finances on autopilot. This month feels disjointed and like everything is on hold (my Roth IRA is in transit too, so even that is static) so I can’t wait to get back to normal and start saving like crazy again.
February 22nd, 2008 at 8:21 am
It would be easier to understand your blog if you put what you and your girlfriend make online and how you budget things. It would help me understand where you are coming from. I make $40,000.00 and my wife makes $25,000.00. If you make $60,000.00 and your girlfriend makes $40,000.00 things are easier for you to accomplish than us.