How to Pay Yourself First

You’ve heard it a million times… “pay yourself first”. And every time you hear it you think “I can barely pay my bills, how can I afford to pay myself first?”

Many people never start paying themselves first, because they are too concerned that they won’t have enough to pay the bills if they put any money in savings.

Well, this is one of those things that you just have to do, even if you don’t think you can afford to.

So how do you pay yourself first when you are worried that you won’t be able to pay the bills? Here’s how…

1. Setup a savings account that you have easy access to. This can be a savings account with your current bank, or an online savings account (you will probably earn more interest with an online bank).

2. Transfer 5 or 10 percent of your income every time you get paid to your new savings account.

3. Eventually, you will get used to saving this money and you won’t even miss it in your checking account. But until then, if you find that you’re short on funds and can’t pay your bills, transfer some of that money back from the savings account to your checking account to pay your bills.

This strategy may be hard at first, especially if you find you have to raid your savings every month to cover bills. But eventually, you’ll find that you are able to save money without dipping into your savings account each month. When that happens, you will already be in the habit of saving, so it will be no big deal to pay yourself first.