Pay Yourself First!

Something that a lot of us tend to overlook is the concept of "pay yourself first", which is a big recommendation many financial experts make. We all spend hard-earned money on ourselves but that money isn't really ours. It's being payed to a hair stylist, babysitters, the movie theater, a restaraunt, etc etc. Paying yourself first means making sure you have money put aside which is all yours, and turning into even more money. I want to cover two things I've done in the past that are great ideas for "stockpiling" your hard earned money and making it work for you!

1) High interest Money Market or Savings Account - There's a lot of these accounts online that you can check out. In the past I've used two different ones. Netbank and now ING Direct. The interest rate right now is down due to the economy. It's close to about 3% or less, when in the past it's been 5%. It should recover as the economy does. This MMA can become your "emergency fund" or savings fund for that home or whatever project you are planning. With ING you can actually refer friends and you'll earn $10 for each who opens an account (with $250 or more), while your friend gets $25 after their account is active for a month. Who doesn't love free money???

Bankrate.com - to compare different savings, checkings and money market accounts.

ING Direct Website - great savings or money market account, run online, connects to your bank account.

Netbank.com - similar to ING direct, they may have a higher or lower interest rate.

2) Investing in Stocks - I don't purport to be a big investor anywhere near the level of people like Mr. Warren Buffet or Wall Street mutual fund managers. But in the past I've used two cheap stock buying sites and done reasonably well, after research. The first is Sharebuilder and the 2nd is Buyandhold.com. They allow you to purchase small amounts of stock ($20 and up at a time) for a fee of about $3.99 or more per transaction. If you want to dabble in stocks, or start to build up your stocks slow, these are a great place to start. Of course if you have more money to invest, go for the places like e-Trade, Schwab and the other big boys who take $1000 or more to start up. I currently recommend BuyandHold.com. You could start up both a "play" stock account (if you want to try short term trading, etc) and an IRA there. I recommed the Roth variety as it won't be taxed when you retire.

BuyandHold.com

Sharebuilder.com

(Note: always make sure to do your research on stocks so you don't lose that money! I tend to like higher dividend blue chip stocks that continously pump $$$ back into your account every few months.)

By paying yourself first, you become disciplined to take 10% or more of all the money you make and devote it to your own welfare. Make the money you make work for you. There's no reason to pay everyone else and neglect yourself!

(PS: You may have credit card debt like many do, but that's still no reason not to pay yourself. Be mindful of the bills, but work on acquiring wealth at the same time, at whatever level possible!)