Series 6 : 🚀 Learning to Save Through “Paying Yourself First” 🎯 ☘️

Welcome to the next edition of the "Family Financial Freedom (FFF)" newsletter. In this edition, we shall talk about "Series 6 : 🚀 Learning to Save Through “Paying Yourself First” 🎯 ☘️ (Father and Daughter Conversation for Children FI) 🚀 ".

This would be an series of newsletter for next few months focussed on Father teaching his Daughter over Financial Independence.

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🏆 I am Amaresh Shinganagutti ✅ , and I write about #financialfreedom, #genai #data #promptengineering #leadership #management #productmanagement #customersuccess #life #data #projectmanagement #amareshss

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6. Learning to Save Through “Paying Yourself First”

The concept of "paying yourself first" is one of the simplest yet most powerful habits for building savings. It prioritises savings over spending and instills discipline in managing money. Let’s dive deeper into how Amaresh introduces this habit to Ananya and why it matters.

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💯 🌈 The Conversation

Amaresh: “Let me share a simple but magical habit with you, beta. It’s called ‘paying yourself first.’ Each time you get some money, whether it’s your allowance or a gift, set aside a little for savings before you spend any of it.”

Ananya: “So, like a secret stash for future Ananya?”

Amaresh: “Exactly! Think of it as paying future Ananya first. This way, you’ll always have something saved for your bigger dreams.”

Ananya: “But how do I decide how much to save?”

Amaresh: “Good question! Let’s make it simple. Start with 20%. For every ₹100 you get, put ₹20 into savings.”

💯 🌈 The Power of “Paying Yourself First”

#### 1. Building a Saving Mindset

When savings are treated as the first expense, it builds a mindset of prioritizing the future.

Amaresh: “If you save first, you won’t feel like you’re missing out. Instead, you’ll feel empowered knowing you’ve secured something for later.”

Ananya: “Doesn’t that mean I have less money to spend?”

Amaresh: “True, but it’s about managing what’s left wisely. And over time, you’ll hardly notice because saving becomes automatic.”

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#### 2. Creating a Safety Net

Savings provide security for unexpected situations or opportunities.

Amaresh: “Imagine you’ve been saving, and suddenly your favorite artist announces a workshop. If you’ve saved, you can join without worrying!”

Ananya: “Oh, so saving isn’t just about boring things—it’s for fun stuff too!”

Amaresh: “Exactly, beta. Savings give you freedom and options.”

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#### 3. Establishing Long-Term Habits

Starting young makes saving second nature as you grow older.

Amaresh: “If you start saving now, you’ll develop a habit that will help you throughout life. It’s like learning to brush your teeth—it’s a small effort with huge benefits.”

Ananya: “So, it’s like building my ‘future fund’ every day!”

💯 🌈 How to Start “Paying Yourself First”

#### Step 1: Decide on a Percentage

- Start with 10%-20% of your income, pocket money, or gifts.

- Adjust the percentage as you grow or earn more.

Amaresh: “If you get ₹500 for your birthday, put ₹100 in your savings. You can spend the rest guilt-free.”

Ananya: “That sounds easy!”

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#### Step 2: Create Separate Saving Spots

- Use a piggy bank, a savings jar, or a child-friendly digital wallet.

- Label it with a goal, like “Tablet Fund” or “Dream Trip Fund.”

Amaresh: “What should we call your savings jar?”

Ananya: “How about ‘The Ananya Fund’?”

Amaresh: “Perfect. Now, every rupee in there is a step closer to your dreams.”

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#### Step 3: Automate Savings

If you’re older or have access to a bank account, set up an automatic transfer to savings as soon as money comes in.

Amaresh: “When you’re older, you can set up a system where your salary or income automatically moves a percentage to savings. No effort needed!”

Ananya: “That sounds like future me will have it easy.”

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💯 🌈 Examples of “Paying Yourself First” in Action

#### Example 1: Saving for a Goal

Ananya: “Papa, I want to buy a sketchbook that costs ₹1,200.”

Amaresh: “Let’s work backwards. If you save ₹100 each week, you’ll have enough in 12 weeks. This way, you’re funding your goal without asking for extra money.”

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#### Example 2: Building an Emergency Fund

Amaresh: “What if your friend’s birthday party comes up unexpectedly?”

Ananya: “I could use my savings instead of worrying about asking you for more money!”

💯 🌈 Why “Paying Yourself First” Works

1. Psychological Boost: You feel accomplished knowing you’re securing your future.

2. Discipline Over Impulse: You avoid overspending because savings come first.

3. Compounding Benefits: Early savings can grow significantly over time (stay tuned for the next article on compounding!).

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💯 🌈 Practical Tips for Parents

- Lead by Example: Share how you allocate savings from your income.

- Celebrate Milestones: When your child achieves a savings goal, reward their effort with a small treat.

- Make it Visual: Create a savings tracker with stickers or a chart.

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💯 🌈 Ananya’s Takeaway

Ananya: “Papa, I love the idea of ‘paying future me.’ It’s like I’m giving myself a gift!”

Amaresh: “That’s the spirit, beta. Small habits today will make a huge difference tomorrow.”

Ananya: “I’m starting The Ananya Fund right now. Let’s save for that sketchbook!”

Amaresh: “And after that, we’ll move on to your next big goal!”

💯 🌈 Next in the Series:

In the next article, we’ll explore “7. Money Games to Win in Life” and explain how even small steps taken regularly can turn into a significant good habit over time. Stay tuned!