Pay yourself first is one such financial term that may alter how you manage your money thus far. This phrase embodies financial wisdom that can maximize your ability to build wealth.
Paying yourself first is a reverse budgeting strategy that prioritizes consistent savings. Rather than saving money after paying for your needs and wants, you are setting it aside for your financial goals before spending a dime.
1. Set Financial Goals
Determine your financial goals and be as specific as possible. Bad habits like relying on bank overdrafts and credit card spending are troubling behaviors to eliminate quickly.
2. Evaluate Your Monthly Budget
Your monthly budget is an excellent place to start. Review your monthly income and expenses before determining how much you can save.
3. Automate Finances With Your Savings Goals
You will want to determine your savings goals based on your short-term and long-term plans. Ask yourself what you can comfortably save from each paycheck.