Many (most?) people live from pay-check to pay-check. They are more or less broke by the end of every month. Luckily, come payday they are back in the money. Unless of course there is an unexpected expense during the month, in that case you’re in real trouble.I used to live like that. I was doing a little bit better than most. I had a budget. In my budget I could see how much I was earning and what expenditure I had. The budget showed me that there would be a surplus at the end of every month. Great! I was obviously going to save that surplus. Problem was, there never was a surplus at the end of the month.

The book “The Richest Man in Babylon” taught me to “Pay Myself First”. Come payday, I pay myself something which is immediately transferred to a high-interest savings account. What is left is used for the other budgeted expenditures. Unless you belong to the category of people that just can’t control their spending, you will usually find that you are not missing the money you are paying yourself at the beginning of the month.

The high-interest savings account is obviously only a short term thing. Once there is enough to make it worthwhile, that money should be invested so it can work for you.

So how much should you pay yourself? Something is obviously better than nothing, but aim for at least 10% of your income.