Pay Yourself First
“And if I asked you to name all the things that you love, how long would it take for you to name yourself?” —Unknown
I saw the above quote years ago, and I felt as if I had to catch my breath. Perhaps all humans struggle with loving themselves first in some form. Getting to know ourselves is a most fascinating adventure. Part of honoring ourselves in all ways, includes honoring ourselves through our finances. This can be done through reducing as many stressors as we can (debt, paying interest, scarcity mindset). But another way we can honor ourselves through our finances is to pay ourselves first!
That’s right, I said it! Pay yourself first! It may sound like I am promoting self-absorption when I say: To yourself, you are the most important person! However, I don’t think it is a classic definition of selfishness at all to care about yourself. It is not an either/or equation. It’s not: either you get to care for yourself and not care about others. Or care only for others and not for yourself. You can absolutely do both, and I sure hope you are.
When we apply this concept to our personal finances, it still holds true. We don’t have to only pay others, and not pay ourselves. Or only pay ourselves, and not pay others. We can certainly do both, and I sure hope we are.
What does Pay Yourself First Mean?
Pay Yourself First means, when you get money, you take some of it and put it in your savings account. Then you pay your other bills. You do not pay all bills first, see what is left, and slide that in your savings account. Of course, if you’ve already paid yourself first, paid bills, and have some left over, you can certainly slide the surplus into your savings account. The main point is: money does not go into your savings account as an afterthought! You are not an afterthought!
This concept can mean different things to different people. I can only speak to my own experience. For me, it means when I get some money (usually in the form of a paycheck), I pay myself a certain amount off the top, and then I budget the rest. The money I pay myself goes into a savings account or an investment account where it stays until I decide I need it. I am planning for my future and I am ensuring no matter what happens in life, I will take care of myself. I love myself that much.
How I began using Pay Yourself First
When I first started Paying Myself First, even while I was doing debt pay-off, I moved $50 into my savings account every pay period no matter what. I then would budget using what was left. If I got paid $1000, I would move the $50, and be left with $950, which would be used to pay bills, give myself an allowance, and throw what I could at debt.
Of course, any amount will work for this, whether it be $10 or $50 or $500. I continued to do this every pay period, without thinking too hard about it. This account served as my Starter Emergency Fund for a long time. Over time, as I was able to pay off some debt, I was left with more un-assigned dollars in my budget. When I was no longer making as many payments toward debt, I was able to bump up the amount ($50) to a higher number and keep paying my savings account (aka me!) regularly.
Are savings really that important?
It may seem I harp too much about the importance of a savings account, an Emergency Fund, and spending less than you earn. Yet, I still found Paying Yourself First a topic worthy of its own article, because of the integrity and self-love behind the concept.
If I don’t believe I deserve this, I end up viewing my savings account as one more difficult thing I have to do. I then miss out on the benefit of confidence and self-esteem that comes with honoring myself. Instead of viewing my payments to myself as a victory, if I view them as something to slog through, I am not only making the Financial Stability journey harder, but I am also not being very nice to myself.
To yourself, you are the most important person! Above anyone you care for, above your employer and your creditors, you are important! Without you, none of this matters! You play an important role, and you deserve to benefit from your hard work and your perseverance.
When I am treating all of this budgeting and finance stuff as a chore, I am unkind to myself in my thoughts for making financial mistakes (when I did not know any differently). In turn, I actually find it harder to stick to my goals. I am more likely to splurge on an expensive haircut, or buy myself some nonsense at Target, even if I did not design my budget for those things. If I view paying myself first as another obligation, I will cheat myself in the future, thinking I am rewarding myself now.
Taking care of ourselves financially is Self-Care
Anyone can benefit from the reminder that we are doing this for ourselves. We are not afterthoughts, or the least important person on the list of people to pay. We are the most important!
And we deserve to be treated as such. So when you make your regular transfer to your savings account this next pay period, know that through that action you are loving yourself. It is growth to put ourselves first, and we become better citizens, and lovers, and parents, and neighbors, and yes, even bill-payers, when we do this.