Paying yourself first is about setting priorities for your finances and determining ways to always make sure you invest in your financial future. If you look at your list of monthly expenses for a moment try to find out where YOUR payment is.
Of course you are probably able to buy yourself a shelter over your head by paying off your mortgage or paying the rent, to buy food and clothes and financial security through your insurance, but whilst you are purchasing these items, somebody else is also benefiting from you buying these products through your payment. Sometimes the one person who does not seem to be getting paid in any way is YOU.
You can pay yourself by setting aside money for you to build a secure financial future, to grow your capital and net worth, to reduce debt and to improve your general financial situation, so that you and your family little by little gain more financial security and freedom. By assigning a part of your money to you, you give your future self an income, instead of spending it all and giving it away to others, you make sure that some of it comes back to you later.
There is a big difference between paying yourself and paying yourself FIRST however. The latter strategy makes sure that you always invest in your financial security and future by taking out money from your monthly pay check immediately as soon as you receive it to save or invest. If on the contrary you wait until the end of the month and pay yourself LAST you likely have a lot less money available as it has by then probably been spent on other things, thereby again paying other people instead of yourself.
Today’s task is to make sure to always pay yourself first no matter what. Set up automatic transfers into a savings account for the day that you are paid and set up your budget to always guarantee a monthly minimum being assigned to your financial future, then budget whatever is left over after that.
Once you’ve completed today’s challenge let us know on Facebook, Twitter or Instagram, remember the #31DayChallengeToFE hashtag. If you are interested in reading more about paying yourself first, make sure to have a look at Step 82: Pay yourself first of the 100 steps mission to Financial Independence.