Pay yourself first! Three simple words but can definitely change your life and turn around your financial situation.
If you really want to be financially free someday, you should know how to pay yourself first before anything else. This is one of the basic and fundamental step you need to know in order to jump start your financial life. Here in the Philippines, we grew in a culture that we pay our self LAST.
We pay our bills, shop our groceries, buy clothes etc. and then we’re thinking to save the remaining amount which is most likely nothing. I know you can relate. This is common scenario in our Filipino culture.
That needs to change. If you really want to save money and be financially free in the future, you need to learn how to pay yourself first. You need to change the way you budget and spend your money. It’s not easy at the start but if you’re committed, it will be easy along the way.
The most common reason why many of the Filipinos fail to pay their selves first is their income. Income is not enough and there’s a lot of expenses. While that statement is true, there’s always a way to fix everything.
You should always keep in mind that no matter how small your income is, you can find a way to pay yourself first. Aside from that, you can also find a way to increase your income and lower your expenses. You just need to be disciplined and resourceful. Here are some suggestions if you want to learn how to pay yourself first.
Simple formula to pay yourself first
Income – Savings = Expenses
Yes you’re seeing it right. Instead of paying the bills and shopping grocery first, the best formula is to set aside savings first. At least 10% or 5% as advised by most financial expert. That 10% you save should not be spend to non-valuable things. You can use that to build your emergency fund or save it in the bank for your future business.
The best thing you can do is to create and set smart financial goals before starting. If you set financial goals, you have the target and map where and what you’re aiming for.
It could be hard at the beginning and there could be a lot of adjustments. You need to remain focused and disciplined so you can achieve your goals. You can start tracking your expenses to know where you’re money goes and create a smart budget.
Once you know how you spend money, you can remove those unnecessary expenses and adjust your budget. You can also start finding part-time jobs to increase your income. You can use your free time to earn money online.
It’s not hard to pay yourself first. If yes, it’s just in the beginning. Once you set and conditioned yourself, it will be easy in the long run.
Lastly, it’s a journey. Don’t pressure yourself. Start small and just continue. Taking small steps everyday can lead you to achieving your goals.
Goodluck to us. Cheers!