What It Means To Pay Yourself First

Posted by under Mindsetting, Money Saving Tips, Personal Finance . Updated: November 9, 2018

Paying yourself first is the simplest way to save money. I’ve learned about this concept a long time ago. It took me a few months before applying it, but when I did, I never stopped. I still do it now actually.

Paying yourself first is very simple thought it can be quite difficult to apply at first.

If you like reading books on personal finance, I’m sure you’ve encountered this advise and I surely hope that you’re able to follow it. If this idea is new to you, then read on and see how you could start investing in yourself.

How To Start Paying Yourself First

Be frugal for a period of one pay day. This does not mean that you will eat instant noodles everyday or walk 20 kilometers just to save on bus fares.

Live comfortably without doing any impulsive buying and committing unnecessary expenses (You don’t need to drink at Starbucks every single day).

After which, see how much of your salary is left at the end of the period. From there, determine what percentage of your earnings do you want to save. I recommend ten percent (10%).

This means that every pay day, you will set aside that much first. No questions, no buts, no exceptions. If that seems a lot, then try a smaller figure but make changes in your spending habits so you could increase the rate to at least 10%.


Then, open a savings account, preferably one that has no ATM card, so that it won’t be convenient for you to withdraw cash anytime. You will deposit the payments to yourself there.

Let me emphasize that this is about paying yourself first, so once you get your salary, your next step is to go to the bank and deposit the allocated percentage. What’s left of your salary is for your other bills and daily living expenses.

Feel free to spend all that’s left until the next salary period (Yay!).

What do you do with the money that you saved?

You can only spend the money in your savings account in two ways. First is for matters of life and death (What use is your money if you’re dead, right?) and second is for investing (Spend it on something that will earn you money).

It may also be wise to hold on to the money in that account for a few months and see it grow. This will bring you a sense of accomplishment and satisfaction. After that, start looking for opportunities so that you can make that money work for you.

I’d like to end with a quote from Chris Johnson, author of the website, Wise Bread. He says in a similar article: “Be proud and protective of your earnings. This money is your chance at great wealth.”

Yes, indeed it is! Good luck.

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32 Responses to “What It Means To Pay Yourself First”

  1. Anonymous says:

    good article. thanks.

  2. carlo says:

    nice article, you are very inspirational. that’s exactly what I’m doing; “investing”. But some people think, “saving money” is abnormal. nice to know that there’s someone out there who understands how i spend my money.

  3. Fitz says:

    thank you carlo, please come back here often to get more tips and strategies on how to achieve your financial goals.

    do subscribe to my blog via RSS or email so that you will be updated with what’s new in my blog.

  4. […] on investing in another income opportunity. Always remember to pay yourself first. Lastly, there are currently independent distributors who offer integrated solutions for selling […]

  5. […] 4. Get some envelopes and label each of them with the expense classifications you defined. When you’re done, add one more envelope and label it, Pay Yourself First. […]

  6. […] You worked hard to earn more money so you deserve a little more luxury. Just remember to always pay yourself first, prioritize your debts and live within your means,” I added. “Again, don’t berate […]

  7. Rat Race says:

    […] Build your savings. The easiest way to save money is to pay yourself first. If you have successfully done this, then find ways to earn more by doing more work. A second job […]

  8. […] To Be Rich Allow me to pay myself first as I nominate my own blog to the list. Personally, writing and maintaining this blog has […]

  9. […] with no savings but is about to start on a job that pays P15,000 a month. If you diligently pay yourself 10%, meaning you save P1,500 each month, and continually invest that money on an instrument that gives […]

  10. […] what about other more serious financial emergencies? I believe that this is where paying yourself first really pays. We should all recognize the fact that life can be unpredictable and this is why we […]

  11. […] So what are you waiting for? Vote for your favorite blogs now. As for me, of course I am voting for myself, Ready To Be Rich. Why? Because I like paying myself first. […]

  12. […] obvious way to get your start-up capital is to save money. Be frugal, live below your means and pay yourself first. The advantage of this method is that if your business fails, then you owe nothing to anybody and […]

  13. […] Pay Yourself First Always pay yourself first. It’s easier to immediately save a portion of your income and spend the rest freely, rather than controlling your spending all month just to have money left in the end for your savings. Try it and you’ll feel less guilty shopping. […]

  14. […] 4: Start saving. You can initially pay yourself first, then move on towards doing other money saving […]

  15. Rhycel says:

    Great post, reminds of the lessons I learned reading the book Rich Dad, Poor dad.

    By the way, it was my first time on your site and you are doing a good job. You have great content here.

  16. jayl says:

    I think I will apply this to myself. Thanks much for a very nice article. I should start paying myself. lol. I have been lurking this page for a long time now, I remember the SM trash to Cash post.. hehe More power to you Fitz.


  17. […] After that, you can now spend the rest of your salary without guilt. This is what they call paying yourself first, which is easier and more fun to do than scrimping on your expenses so you’ll have money left […]

  18. marcelo says:

    hi sir fitz,

    i’ve been searching for some tips on how to start a business and i find your site very useful and informative. I will definitely be one of your frequent visitors from now on.

    god speed.

  19. […] At the top of the list, I paid myself first. […]

  20. helen says:

    i’ve been frequenting your site, as a lurker. this, i just did last week when i opened up my BPI Direct Save Up account… I think this will really help me save since it does not have an ATM or passbook for easy withdrawals.

  21. […] Each pay day, take P500 from your salary and deposit it in a separate bank account. Some banks will actually allow you to open one with just P500 starting balance. This is called paying yourself first. […]

  22. […] “I found the road to wealth, when I decided that a part of all I earned was mine to keep.” That’s a quote lifted from the book, The Richest Man in Babylon, which tells how one should Pay Yourself First. […]

  23. […] our standard of living and then expect the money to come from elsewhere. By having this attitude,paying ourselves first becomes […]

  24. Mary Rose V. Cruz says:

    Napaka gandang business

  25. Rizamay Balista says:

    I enjoyed your talk on the BDJ Fair 2 weeks ago. I was very inspired and enlightened which prompted me to visit your website. I just have a question. Would it be wise to save in AFPSLAI using my boyfriend’s name since he is a member of AFPSLAI. Thank you and more power!

  26. Fitz says:

    Hi Rizamay,

    Thanks for the comment. AFPSLAI is a good and stable investment instrument. However, I would advise you not to invest in it under your boyfriend’s name.

    I’m just being practical here, but until you the two of you get legally married, it would be wise to put your money in investments under your own name.

  27. Diana says:

    Great article! Straight to the point and easy to understand, especially for newbies like me. Thank you!

  28. […] are many ways to save money, but none of them is as effective as paying yourself first – or the simple act of immediately taking and keeping a portion of your income as soon as you […]

  29. […] — one great strategy to do is to pay yourself first. I’ve written articles about that here and […]

  30. […] save money that you will use to invest– track your expenses and pay yourself first. […]

  31. […] is what they call paying yourself first, which is easier and more fun to do than scrimping on your expenses so you’ll have money left […]

  32. […] obvious way to get your start-up capital is to save money. Be frugal, live below your means and pay yourself first. The advantage of this method is that if your business fails, then you owe nothing to anybody and […]

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