Paying Yourself First is The Key To Financial Stability

Everyone can benefit from paying yourself first because being financially secure is powerful. It's the reason you can switch jobs without worrying about your bills being unpaid. Paying yourself first also establishes healthy financial habits that you can expand on. Setting financial goals and reaching those goals will take discipline and paying yourself first is the key to reaching them.

Paying yourself first is the key to financial stability
Financial Habits: Pay yourself first:

I'll tell you a little secret. I never paid myself first because when I tried in the beginning, I failed dramatically. I put too much aside without figuring out if this could really fit inside of my non-existent budget, and whether my lifestyle choices were equipped to handle this new found money saving tactic.


I placed paying myself first on the back burner for months, and even closed my savings account because I was not educated on how to use it properly. It's not hard to automate your savings, but it will take a bit of work on your end if you don't have a lot of funds in the first place or if you are living outside of your means.


You'll be investing in your happiness long term but it means deciding if what you usually purchase when you go to the store is worth it. In a lot of cases retail therapy isn't due to actually needing what we purchase but more for the feeling it gives us.


So, don't be discouraged at the idea of giving up weekly trips to Walmart and Tj Maxx. Keep reading to find out why you should pay yourself first and what a few benefits are.


Related Post: How To Save Money On A Weekly Budget

Related Post: How Creating A Sinking Fund Can Eliminate Stress


What is paying yourself first


It's the act of deducting an amount or percent from the income that you get as soon as it's deposited into your account. This is before you pay bills or decide that the remainder after bills and other expenses is spending money.


Let's say you get paid once a week, you'll pay for groceries, utility bills, hang out with your friends, replace items in the house, and just before you get paid the following week, you transfer over the remaining $40. This would be the opposite of paying yourself first because there was at least $10 you spent that could have been saved.


pay yourself first and live comfortably

Why shouldn't you pay yourself last?


There was at least one item you bought during the week that was purchased only because you could buy it. Opting in for shrimp instead of chicken, spending $100 instead of doing your nails at home for cheaper, even falling victim to marketing ads, can make the amount you dedicate to your own future less.


When you pay yourself last you aren't allowing yourself to truly see what you can cut out of your daily spending, or how you can adapt your habits to ones that would fit your desired lifestyle.



Does paying yourself first work?


Yes.


You shape your life and spending around the amount that is left. As long as you stick with it then you will be sure to reap the benefits. The money you save from your paychecks do not have to go toward a specific goal (yet) for now it can just be a rainy day fund.


The next time your car breaks down, something in the house suddenly stops working, or you feel the need to buy a new shirt, you won't have to break the bank or whip out a credit card.


Note: Responsible credit card usage is always okay.

Paying yourself first works because the money is yours and provides a pathway for your future self.


Make a plan for your credit cards

But what if my pay is irregular?


You don't have to automate the same amount every check.


Everything should be tweaked. Someone who you follow on Instagram that transfers the same amount every week has a different set of circumstances. So if you feel comfortable saving $100 when it's a month that has 3 pay periods and only $50 during regular months, it becomes a system that works for you.


All you have to keep in mind is that saving anything is better than saving nothing at all when it comes to money.



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No one has the same life as another individual, even if they seem similar, because our feelings, thoughts, and perceptions make every experience unique. Be kind to yourself and do what you can without judgement.



Now what are the benefits?


Establishes discipline


It takes strength to know that you were struggling to live paycheck to paycheck but still put $20 aside. To accept that in order to save money, it means taking public transportation or bringing your own lunch a few days a week.


It takes discipline to set boundaries with yourself and say wow "I wish I had to the money to [do an activity or buy something]" and disregard that there money is in your savings.