As human beings, our lives are often driven by habits. Bad habits can often keep us from
reaching our full potential. While good habits, when properly applied, can transform our
lives. Habits can often dictate the difference between success and non-success.
When it comes to our finances, the key point here is to pay yourself first, and then pay your
bills. Most Americans do the exact opposite. They pay their bills and try to save whatever is
left over, which in many cases is very little if anything. It all starts with an abundance
mindset while many people exhibit a lack mindset.
Whether you are saving for an emergency fund, a down payment on a home, starting a
Christmas or holiday savings plan, or savings for retirement, pick a set amount and have
that go into your funds first before you pay a single bill.
Savings first, spending second. These are not bills but investments in your future.
This plan uses a system and automation to beat willpower and emotions and impulse
purchases or spending. One of the biggest advantages of paying yourself first is that it fits very well with automatic transfers, recurring contributions such as 401ks, and direct deposits.
With these deposits occurring systematically, and periodically on a timely basis, it takes you having to decide out of the equation and it becomes a habit. After a period of time you won’t even notice these funds that are paying yourself first and you are on your way to creating wealth for yourself and your family.
Another advantage is that it allows you to start with relatively small amounts on a periodic,
typically monthly basis. Time is a key component here. The more time you have to grow
your wealth. The larger your end result will be. Start with something, even if it’s small. You
can raise the amount over time.
Give yourself a mental advantage. When I talk to many people regarding budgeting, it often
has a negative connotation. I’m tightening the belt too tight. I’m not enjoying life. However,
instead of being overwhelmed by budgeting, pay yourself first can work as a much more
simple alternative. Set your savings amount first, systematize or automate it and live on
what remains.
I’m a big advocate of the KISS plan. Keep it simple and sincere. Paying yourself first is a
simple, straightforward, and effective way to create wealth for your future self, which
allows your present self to enjoy life and have the lifestyle you want without being stressed
out by not having enough savings for your future.
About Stephen
Stephen Dissette
IBT’s Visionary Voices delivers deeply reported thought-leadership journalism at the intersection of business, economics, and global markets. Combining analytical rigor with accessible storytelling, it showcases perspectives from industry leaders, academic experts, and emerging voices shaping the future of business. Each piece is designed to illuminate complex trends, challenge conventional wisdom, and offer forward-looking insights on the forces driving corporate strategy, economic policy, and financial innovation. With a commitment to clarity, relevance, and intellectual ambition, the vertical serves as a hub for readers seeking authoritative analysis and fresh ideas on how the business world is evolving—and what it means for the broader economy.
