To help a person choose saving over spending money, money should not be viewed as what is remaining
after current needs and wants have been satisfied. Pay yourself first is a popular and very effective saving
strategy that can help individual’s choose saving over spending money. Paying yourself first means to set
aside a portion of money (10-20% of net income is recommended) for saving each time a person is paid
before using any of the money for spending.
To successfully practice the pay yourself first strategy a person should set personal goals. Setting goals
helps a person choose to save rather than spend money. A goal is defined as the end result of something
a person intends to acquire, achieve, do, reach, or accomplish. Financial goals are specific objectives to
be accomplished through financial planning and include saving money. Setting goals helps an individual
identify and focus on items that are most important to them and then make decisions that help obtain
those items.
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