Pay Yourself First

What does 'Pay Yourself First' mean?

Paying yourself first means before you do anything such as buy groceries, you set aside a portion of your income to saving. let it be a 401(k) ,savings account, etc. The first bill should be for YOURSELF.

Why pay yourself first?

There are many benefits to paying yourself first, the main benefit is it helps create a saving habit which will help for you in the long run where you don't need to be the person who is on paycheck to paycheck that so many people have to do since they have no sense of saving, and when people do that it hurts their future and causes tons of stress to them as they have to hope to stay afloat. 

• If your employer offers a retirement plan — such as a 401(k) — enroll as soon as possible, especially if the company matches your contributions. Matched contributions are like free money.
•  Money you deduct from your paycheck and invest in a 401(k) or other defined contribution plan is “pretax” money, meaning your contributions are taken from your paycheck before taxes are deducted.
• Starting a Roth IRA is one of the smartest moves a young adult can make. These accounts allow your investments to grow tax-free.

J.D Roth's article on why pay yourself first is beneficial showing how the simple task can steadily effect a person's income in the long run leading up to their retirement . I plan to follow this article but make slight modifications to it to fit my situation as a student.

• No matter what your age, you should make it a priority to develop a regular saving plan. Establishing this habit early can lead to increased financial security later in life. But even those of us who got a late start should do our best to pay ourselves first. I didn’t begin doing this until just a few years ago. Better late than never.

• If you’re just getting started in the Real World, saving may seem impossible. You have rent, a car payment, groceries, and maybe student loans.By paying yourself first, you’re building a cash buffer with real-world applications. Regular steady contributions are an excellent way to build a nest egg. You can use the money to deal with emergencies. You can use it to purchase a house. You can use it to save for retirement. Paying yourself first gives you freedom

Overall, by budgeting, My goal is to save up for my future, such as schooling, house, car, and retirement, and to start saving now, when I still can live with no real negative effects by being young and not having to buy things like a mortgage, bills, and groceries.

http://www.getrichslowly.org/blog/2009/10/19/pay-yourself-first/
http://www.investopedia.com/terms/p/payyourselffirst.asp