What is the Concept of Pay Yourself First?

You might have noticed that money comes directly out of your paycheck before you even receive it, at least in the United States. The government understands the concept of pay yourself first, or paying itself first, by taking out taxes before you get your hands on your income. However, this concept can also be used to your benefit, by applying it to saving money. Pay yourself first simply means automatically setting aside a certain percentage of each paycheck to put into savings, before you do anything else with your money. If you don’t pay yourself first, there will always be something that money could be spent on instead of saving it. There never seems to be a perfect time to start saving money, so you just have to jump in and do it. After you get used to the pay yourself first concept, you really won’t miss the money. It is a good idea to put that amount into a separate account, so you will not be tempted to spend it. You might want to do some investing or simply stash the cash ...  more

You might have noticed that money comes directly out of your paycheck before you even receive it, at least in the United States. The government understands the concept of pay yourself first, or paying itself first, by taking out taxes before you get your hands on your income. However, this concept can also be used to your benefit, by applying it to saving money. Pay yourself first simply means automatically setting aside a certain percentage of each paycheck to put into savings, before you do anything else with your money. If you don’t pay yourself first, there will always be something that money could be spent on instead of saving it. There never seems to be a perfect time to start saving money, so you just have to jump in and do it. After you get used to the pay yourself first concept, you really won’t miss the money. It is a good idea to put that amount into a separate account, so you will not be tempted to spend it. You might want to do some investing or simply stash the cash ...  more