Finances – Pay Yourself First

When you receive a paycheck, what is the first thing you do? Do you pay bills? Do you go grocery shopping? Perhaps, you indulge in a bit of ‘retail therapy’ and pick up items you’ve been wanting?

Most people pay bills when they get paid because bills are usually one of the major reasons people even go to work (aside from those that actually enjoy their jobs and work for personal fulfilment). Bills usually consist of paying expenses that are vital to our survival and/or help us maintain a comfortable lifestyle. After bills are paid, the ‘leftover’ money is able to be spent however a person see’s fit.

The idea of ‘paying yourself first’ is making sure that a certain percentage of your income (which can be decided by you) is paid to you before any other ‘bills’ are paid. That’s right, ‘paying yourself first’ allows you to treat yourself like a high-priority bill!

Some might not see the importance of paying yourself at first but it is an important concept. The money that you put away should be allocated towards the investment of your future. For instance, this money might go towards your 401k or some type of retirement plan. This money is not usually something that is spent – it is invested. Depending on your personal financial situation, you might just want to put the money away towards your ‘rainy day fund’ as well to have available in the case of an emergency.

Whatever the case, make yourself a priority and ‘pay yourself first’ and make sure that you invest in your future.