My husband switched jobs and got a drastic pay-cut back in June, so we have basically been doing a spending freeze since then. It’s been pretty strict, and I don’t do nearly as much online browsing as I used to do.

Sigh.

I guess it’s for the better of our financial situation.

© cristovao31 / Dollar Photo Club

If there’s one thing that I could change about the way I handled our finances at the beginning of this year, it would be to at least save some money (my 6th mistake as family finance manager).

I was once pretty good at doing this. We had several different reasons why we would put money into our savings account, including House, Baby, Car Insurance, Vacation, Emergency, Christmas, Education, and Car. Having several different reasons to save motivated me to save more money. However, I went about it all wrong. Instead of allocating money to these different categories each paycheck, I did it at the end of the month with whatever money was left.

The Easiest Way to Save for a Rainy Day

It’s vital that you pay yourself first. It might sound selfish, but if you want to take care of your family and others, you have to put money aside for you. In my experience, you won’t save much money if you wait until the end of the month to put anything in savings. For this reason, paying yourself first is the easiest way to save for a rainy day.

Now, everybody has different preferences for how they actually save money, but let me explain two different ways that might work for you.

Several Savings Accounts

You can set up several savings accounts through your bank and allocate money to each account so that you can see, at any given moment, how much money is in each account.

One Savings Account

You can set up one savings account and keep track of your money on a spreadsheet. This is the system I used.

For example, in March 2012, I knew we would be getting our tax refund, so I took that into account and allocated $1,135 under our general savings category in our budget. I also put $500 under our “baby” fund since we were about to have a baby that summer, and $150 under our education fund. At least I had numbers in these categories. The problem is that I waited until we had spent a lot of our money throughout the month before we actually put money into savings at all.

I know that if I had put money into our savings account before paying any bills, we would have been much wiser with the money that was left.

I read somewhere that if you are saving money, you are getting richer. In contrast, if you are spending money (what most of us do on a daily basis), you’re getting poorer. If you think about your goals and dreams every time you are paid, you will easily decide that paying yourself first is worth it.

Do you pay yourself first?

Linked to: Thrifty Thursday and Frugal Friday

Want to know more about my job as the family financial manager? Check out these posts:

You Need a Bill Pay System
My Struggles as the Family Finance “Manager”
Mistake #1 – Quit budgeting
Mistake #2 – Mixed up wants and needs
Mistake #3 – Used credit cards for things we couldn’t afford
Mistake #4 – Overcomplicated our budget
Mistake #5 – Checked over our accounts less often
Mistake #6 – Saved $0
Mistake #7 – Spent bonuses
Mistake #8 – Bought low-quality appliances

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Charlee Flaminio

I'm a mom of 3 on a journey to feed my family nourishing foods. Personally, I believe you can cook healthy food and still have time for your loved ones.

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