You may not know this but, a basic winning concept of personal finance is pay yourself first. It’s all about building your savings and healthy money management. Let us explain.
Many of us face a familiar situation from time to time, and that is the promise to yourself or your loved one that you will put more aside for the future. But life takes over, and you find that there’s never enough to put into savings after all the bills get paid. There goes another promise, and so the cycle continues.
First, let’s get the confusion out of the way. Many people consider the phrase, pay yourself first, confusing because it assumes that you’re self-employed when most people get paid by someone else.
Why Pay Yourself First?
Pay yourself first means to save money before spending it. It means you should pay that retirement account or savings account before any other bills or expenses are paid.
Another great way to pay yourself first is paying more on your debts without adding more.
Have you been paying the minimum amount due on your credit card month after month? If so, the balance you owe the credit card company continues to grow as you continue to spend. When you’re paying only the minimum due, it can feel like you’re barely making progress toward paying it down.