Portfolio

Pay yourself first – Focus on Financial Freedom Part #5

We will start the new year and get back to the Financial Freedom exercises, moving on from our last exercise of How to pay off debt fast we will look at the concept of paying yourself first. This is sometimes a foreign concept for entrepreneurs. Everyone else gets paid before they do and then they pay themselves if there is any money left over. While this can be understandable when a business is in start-up mode, you as the business owner should ask yourself how the business is contributing to your personal quality of life.

Granted I appreciate that the majority of entrepreneurs aren’t motivated by money alone. There is the freedom of working for ourselves, the freedom to create, to be more in control of our lives. However these freedoms can be curtailed if money or the lack of money impinges negatively on a person’s lifestyle. So while there may be some balancing to be done, especially at the start of a business, you need to keep in mind the importance of prioritising yourself.

To take this a step further paying yourself first should also be tied into a savings plan. So try and get into the habit of taking your savings right off the top. 20% of your net is a recommended amount. Maybe start off with 5% and work your way up to this figure.

Attached is a short workbook that will help you record your thoughts on this. This is something you can review every few months.

Download the Pay Yourself First workbook and monitor how you can gain a more solid, financial foundation today.

Make sure to keep an eye out in the coming weeks for the next post in our Financial Freedom exercises.

***

For related enquiries, further clarification and assistance with Tax matters contact Joe Cunnane at TRA Professional Services

 

Leave a Comment

Little About Us

Joe Cunnane Practice Owner TRA Professional Services       Qualifications:  FCA Chartered Accountant & AITI Chartered Tax Advisor Joe has over 20 years experience working in both private practice and industry ... Read More »