Have you heard of the phrase “pay yourself first”?

When I first heard this, I thought ha, what?? I didn’t get it but that was a long time ago. It was at a time before I had discovered my financial blueprint and before I understood money. Now I know how powerful it is and if nothing it is the one thing you have to get and implement once you finish reading the article. It truly is life-changing.

What does pay yourself first mean?

Paying yourself first is when you set aside money for your financial goals before you spend money. It’s a simple habit that will literally change your financial life.

You see most people are accustomed to paying for needs, spending on wants, and finally if there is any money left, saving it. One of the easiest ways to do this is to have money automatically go into an account that’s separate from the account you use to pay your bills.

When you pay yourself first, you are prioritizing saving or investing for your future self before you spend money.

How do you pay yourself first?

Here are a few things you can do to pay yourself first.

Invoice Yourself

You can invoice yourself just like a bill, this ensures that you will pay it, trust me it works!

Have your employer do it

One of the easiest ways to pay yourself first is to do it through your employer where you have the option through payroll to have your pay direct deposited to more than one account.

Just as you can have a fixed amount or a percentage contributed to your superannuation, you can do the same for general savings.

Create multiple accounts

Having more than one bank account is a great way to keep money separate for each of your goals.

How to succeed at paying yourself first

Automate your savings

Setting up automatic withdrawals from your wages or from your bank account into a savings account will help you succeed at paying yourself first.

It reduces the temptation to spend money that you have set aside for savings and it’s a set-and-forget strategy that literally happens.

Automate your investments

Paying yourself first isn’t all about saving money it’s also investing. Saving money is no longer enough to build wealth. You must invest to create wealth over the long term.

Saving for short-term goals like holidays or a new car is great. For long-term goals like retirement, investing is key to building wealth over time.

Paying yourself first requires that you get intentional. Be specific about your goals and give your accounts names. When you name the savings fund, it will help minimize the temptation of dipping into the account for an unrelated reason.

Use refunds, bonuses, and other extra cash as opportunities to boost your savings or investment accounts. Remember, you can have direct deposits go into saving accounts too.

We have normalized paying other people and paying businesses before we pay ourselves. Your goals and dreams are a priority, so treat them like that by paying yourself first!