The chances are you’ve heard of paying yourself first. It’s featured on countless blogs and is said to guarantee financial freedom in the autumn years of your life.
Here’s how it works. As soon as you receive your income, you pay yourself a certain percentage of it before anyone or anything else, including bills. This percentage can be as high or low as you want. Along as it’s consistent, it doesn’t matter.
Being consistent really is the key.
If you’re struggling to see the potential wonders of this system, here are 2 killer benefits of paying yourself first:
KILLER BENEFIT 1: YOU DON’T HAVE TO BUDGET
By paying yourself first, you flip the traditional way of saving on its head.
Many people have a certain level of income coming in each month. They’ll typically use this to pay bills and the like. At the end of each month, if they have any money left over, they may decide to save it or spend it on something else.
There’s nothing wrong with spending it, of course. However, this doesn’t foster good saving habits because the savings won’t be consistent.
Some months, they might save £100. Other months, it might only be £10. On the odd occasion, it might be absolutely nothing.
This is easy done. Our willpower isn’t limitless, after all, and resisting all the temptations that confront us on a daily basis isn’t without its challenges.
However, by paying yourself first, you won’t have to worry about resisting temptations. What’s more, you will foster good saving habits.
This is because you effectively do all the saving you want right at the beginning of the period so you can live the rest of your life as normal.
This also means you don’t really have to budget. Once you’ve paid yourself and your bills, the rest is to be enjoyed. No longer will you have to feel guilty about buying that top or that dress because you’re already on the road to freedom.
KILLER BENEFIT 2: YOU’RE NUMBER ONE
By paying yourself first, you also prioritise your finances over everyone else’s.
In a world constantly filled with uncertainty, being able to have control over your financial destiny is super comforting, and you don’t have to come from a wealthy background to do so.
Once you realise your right to prosperity and happiness is just as important as the CEO of Starbucks, you’ll forever be in a better place.
It might not sound like much but in my opinion, paying yourself first should be your number one financial priority if you have no outstanding debts. This way, you can forget about the niggles of budgeting and can start to prioritise yourself over everyone else.