The pandemic has brought so many negative impact in our lives and one of those is being laid off from work, businesses were closed and thus, most of us struggle and had to loan money, be in debt or had to pawned stuff just to meet ends – being left with no choice but to continue living. “Save for rainy days.” – I grew up with this saying and thus, I always save something for rainy days. To be honest, saving is not easy, especially, there are so many factors that could affect or will keep you away from savings such as material things, lifestyle, peer pressure, among others or it is not something that you will think firsthand when you have cash on hand, right? I, myself, too had a hard time doing the savings, consistently. And so, I came up with “Pay Yourself First” mantra.
What is “Pay Yourself First”?
Literally, it is paying yourself first before anything else; before allocating your hard earned money or paycheck to expenses such as paying bills, buying groceries or do shopping – you have to allocate a specific percentage of your income for yourself which will be served as “savings” for your future investment or as a retirement plan.
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Setting aside a certain portion of your income the day you get paid before you spend any of the money. Most people wait and only save what’s left over — that’s paying yourself last. I know it’s kind of hard, at first, but once you get used of it, it is an easy thing to do.
Why “Pay Yourself First?”
Why not? You’ve been working so hard and it is just to reward or pay yourself firsthand. You live to live a life and not to work and just live to pay the bills, right? By doing so, you are:
Consistent on savings per month. When you get into this kind of mindset – paying yourself first, it becomes a top priority. It will also help you to manage your finances and allocate budget on what’s necessary.
The sooner you start, the better. Time is expensive – that’s what I believe. And so, the sooner you start, it will help your money grow faster through compound interest. So yes, please take advantage of time and start saving now. Forget that unnecessary items at your cart for now and save the money first.
Your savings will grow month per month. Imagine, paying yourself a Php100 ($10) per month and doing it consistently. In a year, you already have Php 1200 ($120). Yes, that small amount that you set aside will accumulate and keeps growing. For sure, once you get used of paying yourself first, you are going to pay yourself more the next month, or year.
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How to “Pay Yourself First?”
Let us normalize the “Pay Yourself First” for a rewarding and better future, shall we? But the question is, how you are going to do that? Kindly read on as I share my personal list on achieving it:
Analyze your finances and asses how much you can save every month. In setting a certain amount you have to consider two things: 1) is it realistic? and 2) is it achievable? – write down your monthly income and all the expenses that are non-negotiable, meaning those things that are necessary for our living such as electricity & water bills, payment for rentals (if you are renting) and food. If you think there’s nothing left for savings. – try to check what you can cut down.
Automate it. It will be less noticeable and pressure when you are not doing it on your own. There are banks that offers automatic deposit from your account based on your preferred schedule. I’m using BPI Auto Save-up, you can also do this via GCASH.
Have to add though, I am also doing the manual “Pay Yourself First” – I don’t know, but the more that I see cold cash, the more I am eager to save more. Love to see those cash pile up in my dedicated wallet for savings.
Adjust your savings when your income changes. It might be the time of the year for salary increase. With that, increase your savings not your expenses. Let’s say from Php100, make it Php150, Php 200 and so on.
There is no easy task in this world but with the right mindset and discipline – it comes easy in the long run. It is rewarding to have something to pull when you needed it. And when the savings is already enough to invest on other income generating platform such stocks or acquiring an asset, the more sources of income, the better and in no time, you will get that financial freedom you have been aiming for.
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