Why You Should Always Pay Yourself First

by | Jan 10, 2021 | Personal Finance, Saving Money | 0 comments

Take a moment and think about where you want to be a year from now. Ok, now picture yourself in 5 years and even further out at 10 plus years. What do you want your day to day to look like? Do you want to be working the same job that you currently have? Would you like to have the option to walk away from your career and do whatever you want? It’s possible to accomplish this and you can start now by always paying yourself first!

Paying Your Future Self Starts Now

Nearly half of all Americans live paycheck to paycheck. They don’t save for their future and end up working until they die. I’m not going to lie, it wasn’t until that recently that I stopped living paycheck to paycheck. It’s really amazing how much stress can be lifted off of an individual once they have a bit of a buffer saved up. Don’t be scared if this sounds familiar, we’ve got your back and will help you get started on paying yourself first!

Why It’s Important To Always Pay Yourself First

Have you heard of the term opportunity cost? Opportunity cost means missing out on a potential gain by putting your money somewhere that won’t make you money. When you don’t pay yourself first, you miss out on growth and interest from investments and having the ability to take advantage of financial opportunities when they arise. Every dollar that you save and invest can have a huge impact on your future self.

An example of a missed opportunity would be on a big stock market dip. If you didn’t have anything saved up, you wouldn’t be able to take advantage. Another would be finding deeply discount real estate property but not having the means to purchase it. Time is another big factor. The longer you have your money invested, the larger it will grow.

How To Start Paying Yourself First

  1. Change your mindset about spending money. It’s not unlimited, what you do with every single dollar has an impact on your future self.
  2. If you have credit card debt, stop using your cards right now and put together a plan to pay them down. We’ve personally used the credit card debt snowball strategy to pay off our credit cards. Once you have your cards paid off, start using that money to save and invest or pay down more debts.
  3. Create a budget and live beneath your means. This is simple and anyone can do this, it doesn’t matter how much money you make. Try to save 5 – 10% of your income in the beginning. The more you can save the better!
  4. If you have extra time, side-hustle your way to boost your savings and investments. This can be an awesome way to build your wealth more quickly. You might even be able to create a side hustle that you are very passionate about.

We all know that we should be saving money but still don’t make the effort to save. Honestly, I think this is due to how we are taught. Most of us are taught to be consumers and not savers. Every individual has the power to change and have a positive impact on their future and morph into a saver. Always remember to think about where you want to go and keep moving forward. Start paying yourself first today to reap the rewards down the road!

What does your future look like and how do you plan on getting there?