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  • Wendell Brock

Pay Yourself First

In a world of tightening budgets and higher interest rates consumers are saving less now than they were before the pandemic. What bill(s) do you pay first? As markets have pulled back, so have retirement fund values creating an uncertain future for many pre-retirees. More than ever it’s important to follow the “Golden Rule of Personal Finance.”

We’ve all heard of “The Golden Rule:” treat others how you want to be treated; this is a basic principle to live our lives by to make ourselves, and the world, better. In finance there’s also a basic principle that will make our finances and ultimately our lives better: Pay Yourself First.

The surest way of finding financial success is to save money first and spend what’s leftover. Make saving the new bill that gets paid first! Aren’t you the most important person you know? Afterall, you earned the money in the first place!

The general rule is to set aside 10 percent of your paycheck, then disperse the remainder into your budget. This takes a conscious effort and serious dedication, but if you remain consistent you will develop strong habits, creating a stable financial foundation to grow from.



Many people think that debt is the leading cause of financial distress, but the lack of savings is perhaps a more significant detractor from your financial success. There will always be unforeseeable events that require more from your budget than you were planning for. However, having a deep saving fund will create a solid foundation to build your financial success on and gives you financial resilience. It’s the old idea our grandparents lived by, live on less than you earn!

Saving first and spending what’s left over requires more self-discipline than it does to pay off debts. This strategy is one you play for the long game. Just like a muscle needs to be used regularly to become stronger, being exercised and put to use, so too with developing good saving habits, its muscle memory.

The thing that challenges us the most about not saving is there is always something else we may want. We can always justify our wants; our spending can always expand to our income whatever that may be. It takes discipline to say “No” to the latest shiny new object for sale.

FOMO, (fear of missing out) is a real thing in this world and many people buy things, well, just because. Our minds can play tricks on us making us think we need something that we really don’t. Remember money is emotional, it only does what our emotions/feelings tell it to do.

The real FOMO, most don’t address, is a FOMO about retirement. Missing out on that should be a real fear. There are so many people who are working during their retirement years, not necessarily because they want to, but because they must.

If you are not a ‘natural saver’, meaning that you’re a ‘spender’, then practice saving money. Start small by saving one percent of your paycheck for the next three months, then increase that amount a little more the next quarter. Keep increasing the savings amount each quarter to ten percent or more. To reduce the temptation to spend it, open an account someplace that is hard to get at the funds. Out of sight, out of mind. Then regularly transfer the designated amount to that account. Don’t worry about interest rates, the key is to save money. Growth on those funds can be addressed when you’ve saved a more substantial amount and the muscle memory is well exorcised.

Make a new goal: save more, spend less! Or, live on less than you earn!

photo by micheile dot com

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