What Does It Mean to Pay Yourself First?
Most people think of saving as something that happens after all the bills are paid. But paying yourself first flips that idea around. It means putting money aside for your savings or future goals before you spend on anything else, even bills.
Think of it like this: you are one of your most important financial responsibilities. If you treat saving as non-negotiable, just like your rent or power bill, you’re much more likely to build a solid financial base over time.
It’s a mindset shift from “I’ll save what’s left” to “I’ll spend what’s left after I’ve saved”.
Why This Method Works
Paying yourself first works because it makes saving automatic and consistent. Instead of relying on willpower or hoping there’s money left at the end of the week you make savings the top priority.
This approach builds financial discipline. Over time it helps grow your savings and reduces the chances of spending on things you don’t actually need. It also cushions you against future financial shocks, like job loss or unexpected bills.
Even if the amount you set aside feels small, like $20 a week, it adds up. And most importantly it creates a habit of prioritising your future.
How to Start Paying Yourself First
To begin, look at your income and decide on a realistic amount you can save each payday. This could be a set dollar figure or a percentage of your earnings. A common starting point is 10%, but even 5% is better than nothing.
Set up an automatic transfer that moves this amount into a separate savings account as soon as your pay comes in. Treat it like a bill, something that must be paid every time without fail.
Make sure the account you’re using for savings is separate from your everyday spending. That way you’re less likely to dip into it for impulse buys or unexpected expenses.
Where Should the Money Go?
This depends on your financial goals. You might want to build an emergency fund, save for a holiday, set money aside for a first home deposit or contribute more to your retirement savings.
You can even split your savings into different ‘buckets’ if that helps keep your goals clear. For example, half could go toward long-term savings and half toward a short-term goal.
Just make sure you’re not paying off high-interest debt at the same time without a plan. If you have things like credit card debt you might want to prioritise paying that down while still putting a small amount into savings to build the habit.
Dealing With Tight Budgets
If your budget already feels stretched you might be thinking: “I can’t afford to save”. Even a small amount, like $5 a week, is enough to start.
The key is consistency. The goal isn’t just the amount you save but building a habit of thinking ahead. You’re training yourself to prioritise your own financial security. Once it becomes a habit it’s easier to increase the amount when your situation improves.
Start small, stay regular and build up over time.
Making It Stick
Like any habit paying yourself first takes time to feel natural. You may need to adjust other spending habits or track where your money goes for a few weeks to make space for savings.
It helps to remind yourself what you’re saving for. Whether it’s less money stress, a new car or peace of mind knowing you have a financial safety net — it’s easier to stay motivated when you have a clear purpose.
Use apps or budgeting tools to track your progress and celebrate small milestones along the way.
A Simple Shift That Builds Long-Term Success
Paying yourself first is one of the easiest and most effective ways to take control of your finances. It turns saving from an afterthought into a habit. It gives you more choice, freedom and stability in the future. No matter your income or goals this simple shift in mindset can set you on a path toward financial wellbeing. And the best part? You’re not just budgeting, you’re investing in yourself.