REASONS TO PAY YOURSELF FIRST
One of the golden rules of finance is to pay yourself first. This phrase, in a nutshell, means that you put money into your savings account first, before making any payments. This well-tested theory that strives to ensure that you prioritize saving has so many benefits that will compel you to adopt it immediately.
Saving is one of the most effective strategies of building wealth. That is why it is constantly recommended by financial experts. By using the pay-yourself-first strategy, you place saving at the forefront of your financial obligations and consequently it becomes a priority. Actually, using this method rather than the save-what’s-leftover approach is the surest method to ensure that you save. It has been proven most people that use the save-what’s-left-over approach don’t save. This should not come as a surprise because saving what’s left-over most of the time feels like deprivation. The feeling of fulfilment that accompanies saving is lost.
Saving becomes natural
The beauty of putting saving at first place is that it gradually becomes second nature. It eventually stops being a forced activity and starts to feel very natural. There are so many advantages to this. The more saving feels natural, the less chances that you will skip saving. With all the benefits of saving in prospect, there should be nothing better than the sound of saving becoming part and parcel of your nature.
With your entire income in sight, it is very easy to put aside money for saving purposes than once all the deductions have been made. Saving instantly stops being accompanied with thoughts of denial and begins to feel more like the achievement it should. Saving does after all put you steps closer to the achievement of your goals.
Saving what’s left is a lie
Waiting to save until you have finished paying for all your expenses is a lie because most people who adopt this strategy hardly follow through with it. The reason for this is there is literally no end to needs and wants. Bluntly put, after all your needs and wants there simply won’t be any money to save. Just when you think you are ready to save, something new will come up. Fortunately, this reality can be easily avoided by using the pay yourself first strategy. Saving after making payments may seem good on paper but it is really a terrible idea.
It builds discipline
Numerous studies name discipline as one of the characteristics of wealthy people. A simple way to build your personal discipline is by saving. As you steadily begin making regular contributions to your savings, you will be amazed at how difficult it will become not to save. Gradually, you will begin to feel guilty for not saving. This discipline will come in handy in many facets of your financial life. For instance, discipline will make you instantly more cautious with your spending.
Spend without guilt
Paying yourself first will prevent you from suffering from consumer guilt. With your savings out of the way you can rest easy that your future goals are on track, and spend the rest of your money as you please. You will no longer have the nagging feelings of wasting money. Paying yourself first is the pathway to stress-free living.
Be your own boss
Paying yourself first is one of the fastest way of feeling in control of your life. It helps you stop feeling like pawn of life and more like a captain because you will be securing your needs first. Your needs being your goals and future.