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The key to getting financially fit? PYF.


Are you following our 30 Days of Financial Fitness series? If so, you've already cultivated your Million-Dollar Mind-Set and established short, medium and long-term goals. Great! Next step: What's the best way to make sure you reach those goals, so you stow it before you blow it?

It's called PYF: Pay Yourself First.

PYF means every time money lands in your pocket or piggy bank, you put some of it away towards your financial goals before you spend any of it. Basically, you make your savings goals numero uno before you start spending.

It can be a certain dollar amount like $10 per paycheck or a percentage like 50% of your allowance. It can be included in your budget (more on that tomorrow) and paid first. That's part of the PYF strategy—to make sure the money intended for your savings account hits the bank before you hit the stores.

And what's the easiest way to do this? Make it automatic! Set up an automatic transfer every month between two accounts—one you use for spending and the other you use for saving towards your financial goals (just remember to have enough money in your first account to do the transfer).

You can set this up through your bank or credit union. If you don't have a savings account, get your parents or guardian to help you (more on that later too).

In fact, this is how many adults save for their retirement—they have money automatically deducted from their paycheck and deposited into a retirement savings account. If you get a jump start on automatic savings to reach your financial goals, you'll be miles ahead of everyone by the time you start earning a regular paycheck as an adult.

Be consistent and keep it up. You might go three or even six months before you start noticing that you've got "money in the bank." But pretty soon, saving will become a habit, and you'll be well on your way towards reaching your goals.


If you already have a savings account, go to your financial institution and open another one. Ask your bank or credit union how you can set up an automatic transfer between accounts. Make a reminder in your phone or on your calendar about when the transfer comes out, and commit to making sure you have enough in your account.

Follow our Financial Literacy Month series to get financially fit in just 30 days.

James McKenna and Jeannine Glista  are the co-creators of Biz Kid$, a national financial education initiative based on the award-winning public TV series. They also are the authors of the seriously smart new book How to Turn $100 into $1,000,000 (out this month from Workman Publishing, $13), which outlines in detail every step you need to take to make your million. 


by GL | 4/4/2016