Pay Yourself First

Why do people have a world of luxury? I’m saving so much but I can’t afford what others have? 

No. 1: Don’t compare what you have and what others have? Your life is not the same as them, nor your neighbour. You do you boo.

No. 2: Are you paying yourself first? No, well, read below: 

The Power of Paying Yourself First

Financial freedom is a life we all dream of. But there are ways to achieve it and there are steps that need to be taken. Nothing is as easy as a blink of an eye, but through the test of time, paying yourself first is unlike no other advice we hear. 

What does it mean to Pay Yourself First? 

Paying yourself. You like the sound of it. So do I. It is the concept of taking a percentage of your income to a YOU account. So essentially, it now becomes part of your expenses. You take your income minus all your expenses including a percentage that you allocate to yourself. This way the money you take from the percentage is now focused on you. This shifts the approach from just spending on whatever and whenever to intentional wealth-building.

Pros of Paying Yourself First

Discipline

In a vast society of many many things, when we prioritize ourselves, we live in a world where we want to be strategic with our money. Who doesn’t like spending money on themselves? You are forced to live within your means while working towards your financial goals. The practice of budgeting and training yourself, where every penny goes, make you more financially conscious about your spending habits, thus investing the money you save for yourself, for something you most desire. 

Wealth though Time

Let’s just say you take the amount you pay yourself and throw it into an investment account where compound interest works its magic wand. You have now paid yourself more money. Thus building your one stop step to the wealth machine. 

Emergency Fund

This is your BFF. When you pay yourself first, this allows you to maintain that emergency fund because you can contribute to it. Have that peace of mind and reduce your stress load from any unexpected expenses that could have negative consequences on the money side of things.. 

Mindset Change

When you prioritize yourself and your needs. You are no longer poor. That’s right, Rakstars. You are not poor. You have an abundance of resources at your fingertips. You pay yourself which means you are empowered. You are no longer an observer, you are an architect building that life you so desire. Your mind opens up to all wonders and you can do what you imagined you couldn’t before. Go ice skating, treat yourself to the amusement park or buy that designer item you had your eye on. 

Tips for Implementing “Pay Yourself First”

Set Your Financial Goals

What is your short-term financial goal? 

What is your long-term financial goal?

Examples can include: Luxury handbag, payment on a house, emergency fund, maybe you want to start thinking about retirement. I know I do!

Automation can be your Friend

We can’t simply remember that the 15th of every month and the last day of every month is pay day! So many things happen in life and it gets crazy busy. Try to make the process smooth by setting an automatic transfer to a different account, so that you can watch it grow. 

Beginning will be small

At first, setting everything up and allocating a portion/percentage of the income may be small amounts. That’s okay. You’ve started. This is the main thing! When your income grows, you grow as a person – you will see, so will the amount and value you get for paying yourself first.

Rakstars, paying yourself first is an opportunity to invest in yourself. Whether it’s going to conferences, learning a new instrument or purchasing something you had your eye on, you are allowed to prioritize your wellbeing. By making choices and laying out a concrete foundation for your wealth by paying yourself first. Not only are you going to live the life you dreamed but you will enjoy it. You don’t have to wait till your 99 in retirement to enjoy life. Enjoy it now!