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Definition :

"Pay yourself first" means that you should pay your own savings and investment accounts first. You are "paying" your future self by saving for your long-term needs and expenses.

For example:

Putting money into retirement accounts

Buying insurance, including life insurance and long-term disability care

Paying into a health savings account

Creating an emergency fund

Paying off debts

Advantage of "paying yourself first":

build up a nest egg to secure your future

create a cushion for financial emergencies

Disadvantages many people report experiencing a large amount of stress

However, many people claim that they simply do not earn enough money to save and fear that if they start saving, they may not have enough money to cover their bills.

Ways to apply the “Pay Yourself First” method:

Automate Savings: The money get in a paycheck doesn't have to all go to the same place. You can sending your paycheck to different accounts. You will transfer them to your savings account as soon as you receive your salary
Example: Timo digital banking.

The money will never appear in your checking account and you won't have to worry about spending it.

Pay Off Debt First: Determine a specific amount each month that  will use to repay the loan. And make instant debt payments every time you get paid. That way, you won't risk paying off your debt for other jobs.

Pay in Advance:

Buy insurance: Can pay monthly or pay for the whole year at once. Instead of saving every month, buy insurance and pay it for the whole year.

=>  will have to save a large amount of money in one go. However, then you won't have to worry about saving every month.

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DEFINITION:
Pay yourself first" means that you should pay your own savings and investment accounts first. You are "paying" your future self by saving for your long-term needs and expenses

EXAMPLE:

Saving money for retirement

Buy insurance, including life insurance and other types of insurance

Accumulate budget for health, including expenses for medical examination and treatment, medicine, disease prevention...

Establishing an emergency fund to prevent unemployment risk

Why Is Pay Yourself First Important?
The advantage of paying yourself first out of your paycheck is that you build up wealth to secure your future and create a cushion for financial emergencies, such as car break down, financial crisis, or unexpected medical expenses. Without savings, many people experience a lot of stress.

People usually claim that they do not earn enough money to save and fear that if they start saving, they may not have enough money to cover living expenses. Financial advisors recommend measures, such as downsizing to reduce bills to free up some money for savings. It is also important to know that money set aside for retirement is accessible if needed.

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DEFINITION:
"Pay yourself first" means that you should pay your own savings and investment accounts first before spending any other money on bills, groceries, or luxury items. You are "paying" your future self by saving for your long-term needs and expenses.

FOR EXAMPLE:

Buying insurance, including life insurance and long-term disability care

Paying into a health savings account

Creating an emergency fund

Paying off debts

Building up a retirement account

Creating an emergency fund

Saving for other long-term goals, such as buying a house.

ADVANTAGES:

Accumulate an amount of money for future’s saving account, especially for retirement.

Guarantee for emergencies in financial situations

Decrease a volume of stressful in finance

Guaranteeing that you will save part of your paycheck

Ensures that you will have an emergency fund in case anything unexpected happens

HOW TO START "PAYING YOURSELF FIRST":

Automate your savings: by sending your paycheck to different account such as retirement account, saving account

Pay off debt first: Once you have eliminated your debt, take the money that you were putting towards payments, and start putting it into savings and retirement accounts.

Pay in advance: annual payment for life insurance,...

Start small: If you haven't done any saving yet, you need to start small.

Note
To increase your savings, you may have to find ways to get a second job, take on part-time work and find ways to decrease your spending.

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"Pay yourself first" means prioritizing saving and investment accounts before spending.
For example:
+ Buying insurance
+ If I receive income every month, I'll put money in a saving account and retirement account, or house-saving account,... first (depending on my long-term goal)
==> "Pay yourself first" is a income separation techniques to guarantee your long-term future

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1. Definition:

- "Pay yourself first" means that you should prioritize your own savings and investment accounts. By saving for your long-term needs and expenses, you are paying your future self. (Personal finance & retirement-planning literature, an investor mentality-automatically routing a specified savings contribution from each paycheck at the time it is received)

For example, paying yourself can include:

-Putting money into your retirement accounts,

-Buying insurance, including life insurance and long-term disability care

-Paying into a health savings account

-Creating an emergency fund

-Paying off debts

How much should you save?

The amount saved is usually specified as part of a larger savings goal, and it is frequently deposited into retirement funds or savings accounts.

2. Pros and Cons of “Pay yourself first”

Pros:

+ accumulate cash to ensure your future

+ makes sure your money is going to the right places

+ establish a reserve for financial crises

+ save on taxes

+ achieve saving goals

Cons:

+ not ideal if you’re living paycheck-to-paycheck

+ could lead to undisciplined spending

+ Accruing more debt

3. How to pay yourself first:

1. Determine your monthly income &  expenses

2. Subtract your monthly income from your monthly expenses.

3. Set a savings goal

4. Look to reduce your fixed and variable expenses

5. Calculate how much money you have leftover after making reductions

6. Decide how much to pay yourself.

7. Create an account that is separate from all your other accounts

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In our opinion, simply having a predetermined amount of your money set aside and saved each month before spending on anything else is what the pay-yourself-first strategy entails. The goal is to set aside some money from your savings at the beginning of each month before you pay your bills. You can plan in this way for both the present and the future. After you have saved, you can prioritize your costs and change them to meet the remaining amount of your income. In the event of a financial catastrophe, you will always be protected if you place money aside for savings or an emergency fund. Despite the fact that keeping up with daily expenses is equally important, planning for the future ensures that you will always have money available in case you experience an unexpected medical emergency or lose your job for a while.