By: Molly M Grubb, AIF®
Be selfish. Yes, that is right. Contrary to what society and your parents have told you, it is healthy to be selfish and put yourself first. The flight attendant on a plane will even tell you to put your oxygen mask on before helping others. Our very fiber of survival is built on the need to be selfish. Most people fall into two buckets: either they are so selfish they hurt others, or they are so unselfish they hurt themselves.
What do I mean when I say to be selfish? I am pressing for you to follow one rule: Pay yourself first before paying anyone else. Charity starts at home. If you can’t pay yourself, how can you begin to help someone else? You want to place a predetermined amount that you can absolutely commit to on a periodic basis into a savings account of your choice. It does not matter how large or small as much as it matters that it is something you can commit to, and you can resist the urge to just transfer the money the next day to be spent. This is your emergency account. Have the money placed automatically in a separate account, although this is more challenging to do than suggested. If you do not do this, the temptation to simply go online to your main bank’s website and transfer it where it can be spent is too great. Your emergency account should be at a bank you must drive to, so during your voyage you can question the validity of the spending. The account is to be the fire extinguisher for your financial fire and to be used only when there is truly an emergency. However, at the other extreme, the emergency account can begin to hurt you if it continues to grow beyond the three to six months of living expenses that is recommended (this can vary based on one’s personal situation.) If your savings gets too fat, you will want to look for ways to grow it more efficiently, so your money is working for you. Else the erosion of inflation and taxes on the very limited interest rate the bank will give you will slowly have you losing money.
Paying yourself first should also be done with your time as well. No one talks about this, but it is the most important step in financial freedom. Set aside 10% of what you consider your allotted work time toward education and activities that will generate you even more wealth and passive income that you have not pursued before or are working toward. People on average spend two weeks planning their vacation but only two days planning their financial future in any given year. Be the outlier in planning your future. I am the flight attendant telling you to put the oxygen mask on yourself first before putting one on someone else. Be selfish, so one day you can help someone else and have the peace of mind and lifestyle you have always dreamed of.
This blog is a publication of Grubb Wealth Management. Information presented is believed to be factual and up-to-date, but we do not guarantee its accuracy and it should not be regarded as a complete analysis of any subjects discussed. A professional advisor should be consulted before any investment decisions are made. All expressions of opinion reflect the judgment of the author on the date of post and are subject to change.