Pay Yourself First: An Unsung Self-Care Strategy

 

Journal. Meditate. Do yoga. Take a bubble bath.

We’ve all heard about strategies for self-care. But in today’s round-the-clock consumer culture, taking care of our futures should make the list — and that means prioritizing our savings. That’s why we’re strong believers in the “pay yourself first” strategy for securing a stable financial future.

Think you don’t have the discipline to save money? We believe in you. Read on for our advice on taking care of yourself by saving every month.

 

Understanding the “Pay Yourself First” Strategy

The “Pay Yourself First” strategy prioritizes saving by automatically transferring a portion of every paycheck to your savings or investment accounts — before handling any other expenses. This proactive set-it-and-forget-it approach ensures that saving isn’t an afterthought but a priority. You make the decision to save once (when you first set up your automatic transfer), rather than making that decision every month or week of the year.

For example, you might decide to allocate 10% of your monthly income to a retirement account like a 401(k) or an IRA and 5% to an emergency savings fund. By automating these transfers to occur, you reduce the temptation of spending this money on non-essential items like lattes or happy hour drinks.

 

Benefits of Paying Yourself First

Build a Strong Financial Foundation

Regular contributions to your savings and investment accounts compound over time, leading to a strong financial foundation over time. This strategy helps in accumulating assets for long-term, wealth-building goals, like saving for retirement or buying a home, and encourages you to treat your savings just like any other essential bill that must be paid.

Ensure Sufficient Emergency Funds

Life is unpredictable, and unexpected expenses like medical emergencies or critical home repairs can arise. Having money set aside in an easily accessible savings account can provide financial security and peace of mind, reducing the need to incur high-interest debt in times of crisis.

Cultivate Long-Term Savings Habits

By routinely saving a portion of your income, you develop a habit that prioritizes future financial well-being over immediate gratification. This habit, once firmly established, can lead to more thoughtful spending, less stress, and improved overall financial management.

 

Strategies to Successfully “Pay Yourself First”

• Set Realistic Financial Goals: Specific, achievable, short-term objectives provide motivation and a clear target to work toward.
• Choose the Right Savings and Investment Vehicles: From high-yield savings accounts to IRAs, the benefits, tax advantages, and returns of each savings option can impact its growth.
• Adjust Lifestyle and Spending to Free Up Cash: Downsize your daily spending or opt for less expensive alternatives to minimize any pain from saving.

 

Teach Your Star Saver to Pay Themself First

Don’t forget the Star Saver in your life! Teach them the “Pay Yourself First” strategy by explaining that it’s easier to save if you set aside money consistently and automatically every month. You could start by encouraging them to save 10% of their allowance or birthday money, then watch it grow with regular contributions, interest, and maybe even a 10% match from you.

 

Hometown Help

We know you want to foster a stable financial future for yourself, your family, and your community. By setting up an automatic savings transfer every month, you’ll have less stress and more readiness for unexpected moments. “Paying yourself first” prioritizes your savings and investments right from your paycheck, ensuring that your goals aren’t sidelined by unnecessary expenses.

To set up your savings account and automatic transfer with a dose of hometown help, stop in at your local Famers & Merchants Bank. You’ll be paving the way to security and prosperity.