Pay yourself first: what it means and how to do it

Pay yourself first is a simple rule: the day your income arrives, move your savings out before you spend anything. What remains is yours to spend freely.

1. Why leftovers do not work

Spending expands to fill the money available. If saving waits until the end of the month, there is usually nothing left to save.

2. Choose a percentage you can sustain

Start small, even five percent, rather than a big figure you abandon after two months. Raise it as your income grows or your costs fall.

3. Automate it

A standing instruction on salary day removes the decision. You never have to find the willpower, because the money has already moved.

4. Keep it separate

Send it to an account you do not use for daily spending, so it is not drawn on by accident.

5. Raise it with every raise

When your income goes up, send part of the increase straight to savings before your lifestyle absorbs it.