FNBO Direct Pay Yourself First Challenge

May 27, 2009

FNBO Direct sponsored a contest called the Pay Yourself First Challenge (PYF) during which contestants documented their attempt to save up money for a specific goal. 

The idea behind the challenge was to get people to “pay themselves first” by direct depositing their paychecks into an online savings account, then transferring only what they need into a checking account to pay the bills.

Advice from Liz Pulliam Weston

The contestants were assisted in their savings journey with tips from MSN Money financial columnist Liz Pulliam Weston.  Now that the competition is over, Liz is reflecting back on what the contestants learned about good financial habits and has generously agreed to answer a few personal finance questions for us.  As usual when writing interview questions I got a little carried away so rather than throw all the questions and her responses at you right away I’ll just publish one a day.

Good Financial Advice

Here is one of my first questions to Liz:

The people in the PYF Challenge had a unique situation that the every day person doesn’t have.  They had the world watching, so they had extra motivation to be smart with their money.  They also had access to ask you questions about their money.  For the person that doesn’t have these motivators and resources, where should they turn when they’re having a hard time aligning their financial behavior with their goals or when they have financial questions?

Here is how Liz responded:

“The Internet abounds with great resources, including saving-related blogs that have lively communities of followers. Those are great places to start. For truly individualized advice, though, you can’t beat a fee-only financial planner.”

I think Liz makes a good point; basically, you get what you pay for.  Money Smart Life and sites like it are typically run by amateurs who are trying to make sense of life’s financial puzzles.  You can often find valuable tips and insights on blogs and forums but they’re obviously not tailored to your personal situation. 

As Liz mentioned in a recent column about Suze Orman, one of the “perils of offering personal finance advice to the masses” is that “when it comes to personal finance, there is typically no single right answer”.

I agree that personal finance blogs are useful for getting ideas, raising questions, and discussing possibilities but if you want professional advice then turn to a certified financial planner (CFP).  Of course, there are CFP’s that blog about money like Jeff Rose and Kristine McKinley.  This is kind of neat, you can get a feel for them from their site and see if they’re someone you’d like to work with.

I’ll publish another Q&A with Liz tomorrow, the next one takes a look at the 5 most important numbers to be aware of in personal finance.

Ben

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Ben

Ben Edwards, the founder of Money Smart Life, saved up enough to buy a Nintendo back when he was 12 years old. When he used the money to buy shares of Wal-Mart stock instead, he knew he wasn’t like the other kids… His addiction to personal finance has paid off for his family and now he’s helping you to afford the life that you want. Check him out on the web at Google Plus, Twitter and Facebook.


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Comments

2 Responses to FNBO Direct Pay Yourself First Challenge

  • Mark

    Saving money can be hard. I set up an account over at ING and I do an online transfer every payday. The money has been accumulating for over a year now and I’ve already forgotten about it. It’s like my dad always said, out of sight, out of mind.

  • marci

    Like she said, there is no one right answer for everyone – and an online savings would never ever work for me as I won’t bank online.

    However, I have been paying myself first for years – by depositing my check into a physically accessible money market/savings account, and then drawing out only what I need to pay the few bills I have. It works very well… there is never any ‘loose change’ floating around in the bill paying checking account, only the specific amount of cash in pocket that I allow myself each month.

    Paying yourself first works – whether you do it thru a physical location, or thru an online one. Debt free and lovin’ it 🙂

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