How to Use Timing to Your Financial Advantage

timingWhen it comes to being successful, timing can make all the difference. The timing of your decisions can often determine the results. Making important decisions early can increase your chances of success, while delaying them can lead to missed opportunities.

In many cases, institutions use timing to their advantage, often at our expense. How you can turn the tables and use their strategies to instead benefit yourself.

Timing and Government Practices

government taking taxesGovernments are experts at using timing to their advantage. One of the most common examples is how taxes are deducted directly from your paycheck before you even see your money.

Imagine if you received your gross pay first and then had to settle your taxes at the end of the year. Most people would struggle to manage their finances and might end up owing a lot at tax time. This is exemplified by self-employed individuals and freelancers who earn untaxed sums who end up owing huge amounts with no way to pay!

By deducting taxes upfront, from your salary or wages, the government ensures it gets paid first, reducing the risk of non-payment.

Financial Institutions and Timing

Financial institutions also understand the power of timing. When you owe them money, they expect payment immediately. But when they owe you money, they often delay the reimbursement by processing the transaction over several days. This delay allows them to hold onto your money longer, earning a bit more interest in the process. Their strategy is simple: they make money by holding onto your money for as long as possible.

Debt and Timing

Debt is all about timing. If you pay for something immediately, you won’t have debt. But credit cards and other forms of credit allow you to delay payment, which can lead to accumulating debt. This delayed payment system often plays on our emotions. Instant gratification, fear of missing out (FOMO), and following the herd can all lead to spending now and paying later. Unfortunately, delaying the payment doesn’t solve the problem; it just increases it and pushes it into the future.

We keep our bill paying money in an interest paying account, and pay bills in full just prior to the due date. This allows us to earn the maximum interest on our money, without incurring interest charges. Jim

Using Timing to Your Advantage

So, how can you use timing to your advantage? Many people say they want to save for the future but find there’s no money left after paying expenses. This is because they’ve put saving at the end of their list.

Pay Yourself First

pay yourself firstOne of the best strategies is to be like the government, and “pay yourself first.” This means making saving your first priority when you receive your paycheck. By saving first, you ensure that you actually do it.

Better yet, make the saving automatic. Have a portion of your paycheck automatically deducted and deposited into a savings or investment account. This way, saving happens without any effort on your part, ensuring it gets done. Make sure to put this money to work!

Practice Discipline

Once you’ve paid yourself first, the next challenge is discipline. You need to resist the temptation to overspend what’s left. This doesn’t mean you can’t enjoy life. If you’re paying off your expenses, have little debt, and are saving for the future, you deserve to reward yourself. Just make sure that your rewards don’t derail your financial goals.

Each month we use the future payments option of our bank, and enter our bills as we receive them. we set them to be paid two days before they are due, and earn interest on the money in the interim, while never needing to worry if the bill was paid on time. Jim

Small Changes for Big Impact

Small changes in your timing can have a big impact on your financial health. Here are some practical tips to help you use timing to your advantage:

  • Automate Your Savings: Set up automatic transfers from your checking account to your savings account on payday. This ensures you save without thinking about it.
  • Pay Bills Immediately: As soon as you receive a bill, pay it. This prevents late fees and reduces the temptation to spend the money elsewhere.
  • Limit Credit Card Use: Use credit cards sparingly and pay off the balance each month to avoid interest charges.
  • Plan Major Purchases: Save up for big purchases instead of using credit. This helps you avoid debt and makes you appreciate the purchase more.
  • Track Your Spending: Keep an eye on where your money goes each month. This helps you identify areas where you can cut back and save more.


Timing is a powerful tool in achieving success. By understanding how institutions use timing to their advantage, you can take steps to turn the tables and use timing to benefit yourself. Pay yourself first, practice discipline, and make small changes in your timing to see a big impact on your financial health. Remember, it’s all about timing. Make it work for you.

Water BarrelThe BalanceIn my E-books (“Water Barrel” and “The Balance”) I discuss simple methods to live sensibly for today, take charge of your financial affairs, and invest safely for the long term. For more information please visit David Penna Amazon.

As always, I am not a qualified financial advisor. I just relate financial management to my own experience which may not resemble yours at all. Advice is frequently worth exactly what you paid for it. Most of mine came from expensive experiences.

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