When I was in college, I took a sociology class one semester. One of the assignments was to break into small groups and discuss a monthly budget of a fictional person. In this case study the person was working for minimum wage and lived in a small apartment. We were given some of the fixed costs and then had to decide how this person would spend the rest of their money. Things like rent, food and utilities quickly ate up the majority of this fictional person’s take-home pay.
At the end of the month, the person had $10 left over. I proposed that they save that money (and get a second job). Most of the group pushed for the person to go see a movie, or some other form of entertainment. I tried to make the argument that if you’re really struggling to get ahead, you shouldn’t spend your last $10 on a movie. It just didn’t make sense to me.
You shouldn’t save money for the interest rate. Interest rates at any commercial bank are a joke. You save money because you need a reserve fund for the unexpected. Whether it’s savings, or investing, or planning for retirement, if you view it like a bill, it makes it easier to do. You have a debt to yourself that you need to pay every month, and a Lannister always pays his debts. Don’t think about it. Pay the bill to yourself the same as you would pay your cell phone bill. Pay yourself first and it will pay you back.