Lesson 33 · Written for kid, teen, and little
Pay yourself first — the wealth rule
Plan for your needs, then set aside an amount you can afford to save.
"Pay yourself first" means making saving part of your plan, rather than waiting to see what is left. Each payday, choose an amount you can afford after covering your needs, and set it aside for savings or investing. An automatic transfer can help you remember. There is no single percentage that fits everyone: adjust the amount when your income or expenses change. Regular saving can help you build resources over time, but investments can lose money and wealth is not guaranteed.
Words to know
5Budget
A plan for what your money will do, made BEFORE you spend it. $300 in: $60 saved, $180 needs, $60 wants.
Needs
Things you must pay for — food, transit, phone plan, essential supplies. The bus fare you cannot skip and still get to school.
Wants
Things that are nice but not essential — coffee out, a new game, an extra subscription. Skipping one is annoying, not dangerous.
Pay yourself first
Put money into savings BEFORE you spend anything else. Move $60 out the day the $300 arrives, and budget with what is left.
Lifestyle creep
When your spending quietly rises to match every raise, so you never actually get ahead. Pay goes $300 to $400 and savings stay at zero.
You get $200 a month from a small job. Try splitting it — needs must be covered first, but you also want savings and fun.
Cover the needs ($100 minimum), put SOMETHING in savings, spend what's left. Zero out to finish.
paycheck
$200
left to allocate
$0
Put something in every required bucket.
In the full lesson
- 1Sort into groups
- 2Budget the paycheck
- 3Make the call
Vine has 107 lessons like this one, each written three ways so a 7-year-old and a 17-year-old both get a version that fits.
The practice portfolio is open.
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