A few years ago I implemented reverse budgeting. It’s a “pay yourself first” strategy. After creating a budget, I setup accounts for specific purposes such as emergency fund, car, vacation, gifts, etc. I then setup a direct deposit from my paycheck with specified amounts from each paycheck to go into these accounts every time I was paid. This system has allowed me to be successful in reaching my saving goals. More information about this methodology can be found through this article: https://www.nerdwallet.com/blog/finance/pay-yourself-first-reverse-budgeting-explained/
Congratulations! It takes a real effort to live this way.
Keep it up.
That’s pretty smart! I never thought of “paying myself” as a saving plan.
Interesting. Never heard of that phrase before!
For about five years now, I have had my pay direct deposit into a general savings and transfer a lump sum to checking for expenses a week before due…but it causes some issues since you have to be wary of the quarter-year limit.
All this time, I have been trying to figure out how to budget. I had no idea the "pay yourself first" IS a type of [reverse] budget.
@Joselyn M Do you know of an "at a glance" personal income statement that works with a reverse budget?
An alternative to traditional budgeting is paying all your necessities and bills and covering your savings goals, including retirement and emergency fund. Once you've done that, anything left over each month is yours to spend as you wish.
I seperate my finances into different accounts. This allows me to control my spending. I just notice how much my family eats out. My goal is to eliminate this bill by 30%.
For about five years now, I have had my pay direct deposit into a general savings and transfer a lump sum to checking for expenses a week before due…but it causes some issues since you have to be wary of the quarter-year limit.
All this time, I have been trying to figure out how to budget. I had no idea the "pay yourself first" IS a type of [reverse] budget.
@Joselyn M Do you know of an "at a glance" personal income statement that works with a reverse budget?
Hi @Kristen O. Here is a budget template that starts with saving first
https://www.cunj.com/put-savings-and-yourself-first-with-a-budget/
I like that. Thanks for sharing.
Awesome thanks for sharing
I have already rebalanced my budget with the 50/30/20 method, but I think I will add this in as well. We struggle with overspending, but you can't overspend if its not there!
I would like to pay myself first.
