3 reasons to pay yourself first

Do you have too much month and not enough money? That is a very scary and stressful feeling. Been there and done that, and heard many stories of people in the same boat. Depending on which statistics you look at, rumour has it that most people in North America are 3 to 4 paycheques away from a financial crisis, or worse yet, financial ruin. Those are very sobering statistics. Source

I know how scary it can be to have have an unforeseen crisis potentially ruin you financially.  When my husband lost his job in the months after 9/11, we became ‘that’ family in the neighbourhood, and baskets of food mysteriously started appearing on our front doorstep. The kindness and generosity of our neighbours was greatly appreciated, and it made us realise how blessed we were, as it appeared to those around us that our world was falling apart.

What my neighbours didn’t realise was that for the years before the job loss, when we were busy with three kids, a huge mortgage and a dog, we had faithfully been putting money away, just in case of a crisis, because we have learned from past experience, that life is unpredictable . We didn’t have the newest car in the neighbourhood, we didn’t eat out much, or wear designer label clothes, but we had enough money to buy ourselves time to find a new job and move forward. That security was priceless.

The economic times are changing and the reality of saving for the future or unforeseen emergencies becomes more critical with each passing month. We owe it to ourselves, and to our families to learn how to become good savers, and to take responsibility for our financial future.

Years ago, when we were first married, there was a new book on the market and the author was a young financial planner who wrote a book that would explain financial planning in a simple and concise way. Hence, ‘the Wealthy Barber’ was created by David Chilton. It tells the story of the local neighbourhood barber who has used 10 simple strategies to amass a small fortune.It’s an easy read and has been a guiding light for us as we have navigated many moves, market crashes and all the other trials that life throws at us.

Of all the 10 lessons the Wealthy Barber teaches, the one that sticks in my mind, partly because I also heard it while growing up, was ‘pay yourself first’. Now, before you start with the list of reasons why you can’t do this, let me qualify a few things. First, I am not a financial planner. Second, if money is tight and you feel like you are drowning in debt, then you  need to talk to someone at your bank to get professional advice.

If, however, our starting point for this conversation is that you have a job, and that you have a fairly good grip on your bills and credit cards, then let’s change the question to focus on life for a minute. Do you currently have savings put aside to deal with life’s emergencies? We all know that life happens, changes daily and throws curves balls when we least expect it. The question then becomes: how am I going to prepare for the future and any mishaps that come my way?

The answer is that we have to learn to pay ourselves first.

How exactly do we go about doing that?

In my experience, the easiest and least painful way is to set up an automatic transfer from your main account into a savings account that you don’t touch!! You know when your payday is each month, so go ahead and set up a standing order to automatically send 10% into an account you don’t touch! If you think of paying yourself as an automatic bill payment, then you can factor that into your monthly budget, plus you get points for financially taking care of you!

Three reasons why you should pay yourself first:

  1. You are worth it and you deserve to know that you are taking care of you now and you in the future. The logic behind this approach of paying yourself as soon as you receive your paycheque is that often we promise that we will pay ourselves at the end of the month. The funny thing is that at the end of the month, often there isn’t any money left over. We continue this ‘promise to pay ourselves’ every month, but alas, it just doesn’t happen. By paying ourselves first, you are making your financial security a priority and taking care of you! You are worth it and deserve the peace of mind that comes from knowing you are building a financial reserve.
  2. 10% off your paycheque doesn’t hurt as much as we think it will, assuming that your financial house is in order, or getting in order. If the money is taken automatically out of your account, you won’t miss it. If near the end of the month,  you do ‘feel pinched’ for money, then remind yourself that you are building your future self a support plan.
  3. If you have children, then you are modelling responsible financial management. Our children watch and learn from our behaviours, both good and bad. Letting them know that you are putting yourself and your family first shows that you care about yourself and your family.You might be surprised at the satisfaction you receive from knowing that you paid yourself first! As the money in your primary account is used through out the month to pay bills, help the kids, pay for the dog, gym memberships and whatnot,  you can congratulate yourself for taking care of you first. The trick is not allowing yourself to touch that saved money! It is for the future, not for now, or that pair of shoes that caught your eye!

The last time I visited my daughter, we went to the bank and I helped her set up an automatic monthly payment plan. She is living in one of the most expensive cities in Canada, barely earns minimum wage and yet she has started her own savings plan. She shops at second hand stores, doesn’t eat out much, and she lives in a house with 7 roommates, but she feels good knowing that she is saving for her future. In her case, because her paycheques are a bit sporadic, we arranged for the withdrawal dates to be 5 days after she is supposed to get her paycheque. The most important thing is that she is learning about saving for her future and she is making it happen. It is a win/win situation!

How about you? Are you making sure that you put yourself and pay yourself first, or have you had success with paying yourself first?

I’d love to hear your stories!

You are worth it, and you deserve to take care of you!

Until next week,


p.s. Wondering why I picked a tree for this post? The best time to plant a tree was 10 years ago, the next best time is now. The same goes for saving money, today is a great day to start!




  1. Janet

    Great advice Laurie, and like any other change, it’s getting started that is the hard part. Once you see the savings grow, it is easier to commit. So it might not be 10% at first but don’t let that get in the way. Just do it!

    1. Laurie Laurie

      Hi Janet, you have made a really good point about starting to save a smaller amount, and building up to 10%. The key thing is to get started! Once you find out how painless automatic savings can be, you can increase the amount until you reach the 10% mark. Thanks for the suggestion!

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