Pay Yourself First
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To pay yourself is to set aside a set amount of money from your pay check to have it build over time so you can have a large sum of money to fall back on for retirement or if something where to happen that would put you out of work. Starting out by taking around 5% of any given paycheck is a good start, but over time it would be wise that you raise the amount you put aside. The best way to do this is by starting a bank account that will automatically take the set amount of money out every paycheck and will gain interest on the amount of money in the account. By doing this not only will your account grow by what you are putting in it, the interest collected by the bank will help grow the account even more. Having money set aside that you don't touch can help a lot in the future, it can help pay off loans, down payment on a house or car, or in worst case you are unable to work you will have money to live of untill you can get back on your feet.
Great post Graham! I don't use many budgeting tools, but I'm sure I can make use of some. I do have a savings account at the bank where I get increased interest and my account doesn't get fined every month. I use this savings account to help save up for my post-secondary education. I do want to make use of some investments in the future, but I'm not sure I'm ready at this age to do things like RSPs. And you're right about compound interest. Investments can grow quickly!
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