Save Money: Pay Yourself First

Pay Yourself First

Saving money can be simple if you have a plan and if you use that plan.

Before you create the plan you will need an accurate budget which tells you what your income is and what expenses you have. The surplus, if any exists can be saved.

The budget must reflect all you spend money on, food, coffee, travel, lunch, groceries and so on.

Once you have that worked out and on paper you can review it and see what changes can be made. These changes can enlarge or create that surplus.

Now, if you truly want to save, you will need to add one payee to your budget’s fixed expenses. You have the house payment or rent, credit cards, insurance and whatever other bills you must pay each month.

The one payment that is not on many peoples’ lists is themselves. That is right put you on your must pay list.

In fact, I say what you need to do is develop the pay yourself first mentality. Each and every time you get paid or otherwise come into some money pay yourself a percentage first, before you make any other payments.

The best way to make this happen is when you draw up your budget. Do not consider yourself a budget item; you are more than that.

The household budget is produced after you have deducted your pay.

Now how can you do this?

Well, let us go back to income and expenses.

If you get paid every two weeks, write down how much you bring home or how much is direct deposited into your account. This gives you your working figure. If there is more than one income in the home do the same for each one. Then add them up.

This gives you the total amount of money you earn. Now deduct 5 to 10 per cent from that total as your pay.

That is the amount of money you have for expenses. Use this figure to generate your household budget. If you have a surplus, then you can use that surplus to pay down your debt.

If you break even well you are still saving.

If your expenses exceed your income; then you will not be able to pay yourself the five or ten percent until they match. Try a lower percentage. The idea is to get into a frame of mind where you pay attention to your money because you are benefiting from that attention.

Review your budget; are there any areas where you can reduce your expenses? : Any unnecessary expenses, any hidden costs?

Once you have the budget set and the amount of money that you can pay yourself each time you get paid, no matter how small it is, and then you have set out on the road to savings and getting your money to work for you rather than using it to simply exist.

In time as you pay down debt and find new ways to reduce expense your pay will grow and yoru savings will as well.


Do you pay yourself first?

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Comments 17 comments

Scottie JD profile image

Scottie JD 8 years ago

Wise advice, time honored, but easy to forget

Bob Ewing profile image

Bob Ewing 8 years ago from New Brunswick Author

I agree, we do forget.

NYLady profile image

NYLady 8 years ago from White Plains, NY


Great hub that reminds me to save, save, and save, and spend a lot less. I will heed your words of wisdom in this tight economic climate.

Bob Ewing profile image

Bob Ewing 8 years ago from New Brunswick Author

Thanks NY, it is a good time to pay attention to our money.

mikewitt profile image

mikewitt 8 years ago from Davenport, Iowa

Hi Bob,

Excellent hub and perfect timing with how the economy is going. Thanks for sharing, all it takes is one step at a time :-)



Bob Ewing profile image

Bob Ewing 8 years ago from New Brunswick Author

Hi Mike, thanks for stopping by and yes one step at a time  works.

pakgraph profile image

pakgraph 8 years ago from Karachi - Pakistan

Good Sharing Bob.. right now, arround the globe only one discussion arranging by Governments and local bodies... The Economy... I'm glad that you've done it again.... ! You are standing with all Global Financial Think Tank but did really a good job...... Well done!

Bob Ewing profile image

Bob Ewing 8 years ago from New Brunswick Author

Thanks pakgraph for dropping in for a visit.

DarleneMarie profile image

DarleneMarie 8 years ago from USA

Great advice Bob...figure it up first, then pay yourself before you have a chance to spend it later. Thumbs up

Bob Ewing profile image

Bob Ewing 8 years ago from New Brunswick Author


Kulsum Mehmood profile image

Kulsum Mehmood 8 years ago from Nagpur, India


Very wise advice. But the savings also get spent many a time.

Bob Ewing profile image

Bob Ewing 8 years ago from New Brunswick Author

Savings sometimes need to be spent.

Granny's House profile image

Granny's House 6 years ago from Older and Hopefully Wiser Time

Hey Bob, I can't wait to start payng myself. I am 52 but this is still a great idea. Thanks

I have rated up

Bob Ewing profile image

Bob Ewing 6 years ago from New Brunswick Author

You are welcome,all the best.

ed77burns profile image

ed77burns 6 years ago from USA

Good idea.5 stars from myside.

bri36 5 years ago

no matter the age, Wisdom is always in demand. this is great advice Bob and we have started to "pay" ourselves 2% as this is all we can afford. thank you for the ability to look back in time and find stuff like this.

Bob Ewing profile image

Bob Ewing 5 years ago from New Brunswick Author

Well 2% is a good start, thanks for dropping by.

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