Pay yourself first: The magic of 10% savings

It is a spiritual axiom that what you give you will receive but have you heard about tithing to yourself?  Check this out.  It is the easiest way I've found to increase your abundance and decrease financial stress.  Read on to find out about how and why to pay yourself 10% of your income first before you spend the rest.

So for years I have been giving away 10% of whatever comes through my fingers back to what I consider to be my spiritual source (which is my church or center for spiritual living).  I have heard so many powerful stories where people were down to their last ten dollars and it in no way made sense to them, but gave away a dollar out of gratitude and it came back to them tenfold.

This way of living (augmented by, I hasten to admit, a lifetime of privilege and inherited wealth) brought me a life where I have experienced a constant easy flow of money, it comes and it goes in equal measure.  Whenever I need it, it’s there.  However, what I have not accumulated is the habit or the experience of savings, an important part of money management.  Fortunately for me, my husband had done that for me.  Unfortunately, my unwitting decision to rely upon him to provide this service has meant that I had never actually developed the habit of savings.

A few years ago someone introduced me to the concept of “pay yourself first" (aka "tithe to yourself")  In this model, I “give” 10% to myself by saving it off the top.   The off the top part is particularly important for both of these.  I have been told (and have experienced) that for either the giving to others or giving to myself to work, every single dollar that comes through my fingers, 10 cents of it gets given away, 10 cents of it gets saved and then I only have the other 80 cents to spend.

There can be a strong belief amongst those who have experienced living paycheck to paycheck that there is never enough, and that there simply won’t be enough and that I will be lucky even to pay the mandatory bills let alone anything discretionary like tithing or saving.  For those who are in debt, it seems terrifying to put any “extra” money to savings instead of debt reduction.  And it seems doubly foolish.

And that is an entirely rational conclusion to draw if that has been my experience.  However, I have learned and coached others with that experience through an experiment with paying themselves first just to see how it goes.  I mean, really, since its savings, what’s the worst that can happen? I can always dip into the savings if I really need to, right?

How to experiment with paying myself first:

o   $1000 lands in my hands or bank account. 

o   I immediately take $100 out of that $1000 and put it in an actual savings, or in a safe jar or envelope marked savings. 

o   Now $3000 lands in my hands or bank account.

o   I take $300 out of that $3000 and put it in envelope or savings

o   At the end of the month, from my $4000 income, I have $3600 still available to pay the bills and $400 in savings which I tell myself is “untouchable.”

How it often is experienced

o   At the end of the month, somehow the $3600 “magically” seems to be enough to pay the bills. 

o   Either an expense that I usually pay has gotten lower or extra income has come in or my consciousness of saving has caused me to reduce some discretionary expense, whatever causes it, it works.

o   The next month I’m interested to see will this really work again?  It works again.  Now I have $800 at the end of the month.

o   I resist the temptation to begin planning a vacation or something else with that money.  This isn’t what this particular savings is for.  I can save for a vacation in a different envelope now that I get the idea.  THIS is my prudent reserve that I don’t touch unless I absolutely need to.

o   At the end of a year I have somehow MIRACULOUSLY saved $4,800—whaaaaat?  How can that be.  It is not anything I have ever been able to do.  I feel more secure, less stress, more possibility.