Many financial planners all over the world believe in and live by the concept of “Pay Yourself First.” According to George S. Clason, there is only one key ingredient to become rich, and that is – Pay Yourself First.
But, what exactly does it mean, you wonder? Well! It means saving some money separately right after you get paid and before you spend all of your money on other things.
If you pay yourself first instead of paying for the groceries, bills, rent, right after you get your paycheck, then it will benefit you by increasing every time you pay for yourself. It becomes a stock of money which is saved and can remain there until whenever you want. You can start by paying a small amount of money for yourself and then gradually increasing it as you get used to it.
Making this a habit will certainly make you rich slowly and if you don’t believe me, then go on and take a glance at the few reasons why you must pay yourself first.
#1 It sets the priority
By paying yourself first, means you know that you are your own priority. Buying unaffordable things and spending on unnecessary things is not important than your and your family’s future. It means you have already set your mind to save some money for your personal purpose and then spending the rest on something else.
#2 It gives a feeling of security
Sometimes you worry about what will happen if all your money is spent on the telephone and electricity bills, rent, shopping, and ration, and you are left with nothing. These worries tend to occur if you right away spend the money that you have just earned. But, you can ignore such feeling of uncertainties by simply saving some of your money separately. Later, when you see the numbers in your savings account expanding, you will take a sigh of relief and feel confident that you have enough money to keep yourself and your family happy and all of the saved money belongs to you and only you.
Once you do realize the effect of paying yourself first, then you will naturally make it a habit of paying yourself first every time you get your salary and let the money grow as much as it can.
Also, if in worst case scenario, you find yourself in a situation where you need a lot of money due to an emergency, then you won’t have to look here and there or ask somebody else to help you. Instead, you can use your saved money and get yourself out of that situation.
#3 It does not make you a spender
Yes! People who spend first and then save are popularly known as the “spenders.” But, you don’t want to get into such list, right? As desires to buy or spend on something can come anytime and sometimes, it is quite tough to wipe away such feelings. But, if you first separate some amount of your salary and then buy yourself whatever you wish, then it will be very beneficial for you. So, what you got to do is first put some of your money into savings account, invest it, and spend the rest as per your needs.
#4 You become more disciplined
Regularly paying yourself first can gradually make you financially discipline which will not only help you in this particular situation but other financial and nonfinancial situations as well. At first, it might feel quite difficult to keep paying for yourself but, gradually, it will be easier and become a habit of yours, and it will come naturally to you.
Also, once you realize how paying yourself first is making you wealthy day by day, you will look out for more ways which will help you to earn more and save more.
#5 It becomes a reward cycle
You must be feeling bored of the same day-to-day activities. Same old waking early, getting ready, going to the office, getting back home, sleeping and then again the cycle repeats. But, what if you can add spice to your daily life? Yes, it can happen, and you can bring a slight change in your daily life if you keep on paying yourself first. By doing so, every time you will see your money grow and trust me, it will give you a sense of satisfaction and happiness.
#6 You become financially smart
By continuously being on the “Pay Yourself First” track, you slowly become financially smart and understand the value of saving money. This will help you tremendously in future, and you can also teach such financial strategy to your children as well. Teach them the concept of paying themselves first and how they can benefit from it.
You can also include other stuff like how to live within your means and avoid credit card debts, etc. Teaching such important stuff to your children at early ages will definitely make them financially smart, and they will not worry about how to spend and save their earnings when they become adults.
#7 It becomes an investment
The money that you will require to invest in small business, stocks, and other options will come by the money that you have paid yourself all these times. But, you must keep in mind the fact that the money that you have saved by paying yourself every time, should not be used for anything else except investments.
Always remember not to spend your saved money on shopping, buying cars, vacations, parties, and other unnecessary material things. Your saved money should be strictly limited to the investments and nothing else, except worse case scenarios.
#8 It helps to reach financial goals
Paying yourself first is a tried and tested method which actually helps you to save great chunks of money and making you wealthy each passing day. But, if you have set up a financial goal for yourself then paying yourself first method will help you tremendously.
You must always keep the fact in mind that becoming rich is in your own hands. All it takes is bigger thinking, discipline, patience, and constancy.
Leave a Reply