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Wednesday, January 30, 2013

Pay Yourself First

One of the best lessons I learned from my financial journey is how to pay myself first. Well, actually, to be more accurate, it's "pay back to God" first by tithing, then myself second. But for the purpose of this post -- let's talk about setting aside and not touching our earnings for our savings and investments first, then live on what's left of our income for our other expenses. As opposed to spending our hard-earned money paying our bills and buying stuff, then saving what's left of it (if there is something left that is).

Why It's Important to Pay Yourself First

I was taught at a young age that I should not be selfish and greedy. Being the eldest, I learned how to share and be generous with what I have and to put the needs of others first before my own. It comes naturally to let other people pass before me; stop what I'm doing to be of assistance; and to put aside what I want if it means not being a burden to other people. I didn't see anything wrong with it, in fact, this characteristic of mine is often praised by others.

As I grew older, I felt that I have allowed myself to be available and generous for everyone but myself. As much as I highly treasured my friends and family, I have nothing to give myself but cutting words that hurts too deep. I spent so much time in making sure that I please everyone, but I failed to spend time making myself feel good. Ultimately, it brought me to a breaking point and I found myself lost and drained of life.

Now, I am making it a point to be generous with myself and not feel guilty with prioritizing myself first. I learned that when I invest in making myself feel good, this translates to my outside world as well. My relationship with other people is much richer and fuller now than my half-assed attempts before. In the end, everyone benefits. 

The Concept of Paying Yourself First

"Paying yourself first" means that when you receive your salaries, you allocate a certain percentage to your savings and investments first, and make sure that you do not use this money for any other expenses other than what you have saved it for -- your future self.

Let's say your goal in saving money is to have an Emergency Fund. Then one day, the latest iPhone 5 was launched and you wanted to buy one. However, you found yourself short of cash and you've used up all your credit card limit. Even if you are itching to touch your savings -- DON'T. Stop eyeing your savings and just put off buying that iPhone 5, until you have the money to buy one, because purchasing this latest gadget is not an emergency but a luxury. You have to remind yourself that the reason why you're saving is because you want to have a cushion for yourself for emergencies such as job loss or illness.

Ultimately, this is what paying yourself first means for me. You give priority to what you value most in your life. You invest in your needs first, not wants.

A Paradigm Shift

Moreover, paying ourselves first doesn't only benefit us but others as well. In my experience, paying myself first caused a paradigm shift in me that translates and affects my way of living. And I believe that this can also happen to those who practice paying themselves first.

Financial Security. Safety and security is the second basic needs of human beings, according to Maslow's Hierarchy of Needs. When we have savings, we have something for rainy days. There is a sense of security that even if an unforeseen event strikes -- like losing a job or someone in your family needs medical care -- you know you have savings to fall back on. This sense of financial security lessens our anxiety and helps us have a more positive over-all feeling.

Abundance Mindset. As we see our savings grow, we have a concrete visual of abundance in our lives. As we are continually exposed to this financial abundance, our focus is being shifted from lack to abundance. The Law of the Universe says that "the more we focus on a particular idea or thought, then we will attract more of this idea or thought". This means that the more we focus on abundance, the more abundance we will attract in our lives -- not only financially but in all areas of our lives as well.

Natural Giving. When you pay yourself first, what you are really practicing is generosity. Although you are starting to be generous towards yourself at first, as this becomes a habit, you will find yourself being more generous towards other people as well. It's just the joy and the fulfillment in giving that will move us into becoming natural givers, I believe. And for me, this is the most rewarding of all because I am able to be a blessing for others as much as I am blessed.

These are just some of the paradigm shifts that I have experienced by practicing paying myself first. I'm sure there are others more. If you are already practicing this, I would love to hear how paying yourself first changed your life! =)

On my next post, I will share with you the methods I use in paying myself first.

Praying for your happiness,


  1. Thanks for sharing this great tip!

    I used to be able to save a lot. But lately I've found it harder and harder to do so. But when I went ahead and paid myself first, I found I could save just as much as before.

    1. Thanks for reading and sharing, Carlos! =)

      I hope that those who find it hard to save realize that this is not a difficult and impossible feat especially when they start the habit of paying themselves first, just as you've discovered. ;)


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