Tuesday, March 3, 2009

5 Good Reasons Why You Must PAY YOURSELF FIRST

At the end of the month, most of us, the monthly wage earners are waiting for our salary from our employers. Some receive their salary by direct bank-in to their bank accounts and some receive their salary through cheques. Perhaps, there are also employer who pay cash to their employees. No matter what, the most important part is we want to see the $$$ after a month of hard work. But, do you realise that upon receiving the $$$, we 'transfer' a big portion of our hard earned $$$ to someone else? We 'transfer' the $$$ to our creditors - the bank from which we loan our house, another bank from which we loan our car, the insurance company from which we seek for insurance and medical coverage, the Telco companies who provide us with the phone lines/broadband services, the cable company who provide us with updated movies/drama/entertainments and the companies who provide us water and electricity. Some of us also pay a big portion from our monthly pay cheque to settle personal loan, credit card debts, study loans and many more loans. After paying all our creditors, little $$$ left for us. Then, we tell ourselves that 'I don't have money for saving'. Does it sound familiar?

It is never easy to train our mind to pay ourselves first. But, you should at least try to. Here are 5 good reasons why you must pay yourself first:

1) You earned the $$$, You deserved it. You only receive the $$$ after a month (or an average of 160 hours) of hard work. It's precious. You gotta save some of it under your name. You can use it to build your emergency fund, as monthly savings or even preparing for your retirement fund.

2) Put yourself at first priority compare to the rest of creditors. By practicing paying yourself first, you will treat yourself as one of the monthly creditors. The main difference is, you will maintain the $$$ under your name and keep it safely (in an interest bearing account) rather than transferring it to someone else account. Furthermore, it usually won't work if you wait till you finished pay the rest of the creditors, then keep the balance. Most likely, there is no balance left.

3) You must prepare yourself for unexpected situations like out of job or not being able to work or earn $$$. Now that you're healthy and fit, and able to earn $$$. Have you ever think of the situation where you are not able to bring home any $$$? What will happen to you and your dependents? The weather won't always be sunny. You must prepare yourself for the rainy days.

4) It is your baby step in financial planning. Once you start to pay yourself first and see the $$$ growing after a few months, there is a kind of special energy that will encourage you to be more alert towards financial matter. You will get hooked into saving more $$$.

5) You love yourself. One of the many ways to show love is by providing financial security to oneself. By paying yourself first, it shows that you care about yourself and your future.

We deserved a good portion from our hard earned $$$. Start now - upon receiving your salary, make sure you pay some $$$ to yourself. Start with small amount and when you get more comfortable, increase the amount. If you didn't pay yourself, who else would?


  1. When come to think of it, it's really true, we always think about paying the bills first. It's important to save a portion of the income someplace worthwhile. It's better be ready than late. ^^ Thanks yan for the great post.

  2. Hi Ching Ya, thank you for your comment. Yes, must pay ourselves first because we are more important than our creditors ;p