'Pay Yourself First' Means Nothing

“Pay yourself first” is a great phrase that means absolutely nothing. It is thrown around all of the time and when you say it, you actually feel good about yourself. Financial gurus and the media use this phrase as a badge of honor like they have revealed a great mysterious secret. “You will become financially stable/wealthy/have Oprah dough if you pay yourself first”, they blurt out without hesitation. But how is it done? What does it mean? Who cares?

Let’s start from the beginning: Maybe you’re finding it hard to save. That’s not uncommon, for even those who are free of debt sometimes find it difficult to save money. Many people spend all their money each month and can’t or won’t change their spending habits. This is where this strategy could change your perspective on money.

Every month two things happen. The first is you spend all your money each month leaving nothing to save. The second is you can’t change. You get your checks each month, write out all the bills and expenses and discover that you have broken your promise (once again) that you would save. You don’t realize it but you are actually treating yourself like a creditor, but a very weak creditor because you are never collecting any cash. 

To change this you must pay yourself first! Here is that crappy phrase again but how to do it? Several ways could work. Before you pay your bills put $10, $20 $50…into a savings account or coffee can and then pay your bills. Either of these has about the same return on investment (zero) but your mindset has started to shift. You will have access to this money but it may or may not be for important things and once it is spent it is gone. If you are worried that doing this will cause you to run out of money, don’t worry you probably will because you always do, right? At least you will have put a few bucks away first. 

The above paragraph is the way most financial advisors teach. I’m not a financial advisor because I don’t want to advise you. I want you to stop believing what you're told and think for yourself. I could teach you a strategy but I want you to question it until you are satisfied with the answer. Don’t accept it just because I “advised” you on it. The above strategy may work but as you know we all have emergencies and just everyday events come up in our lives that cause us to dip into this cash. We deplete our money until we are upset or frustrated with ourselves.

What if there was a financial entity that forced you to Pay Yourself First, the cash was liquid when needed, provides tax advantages, and also builds so that you own your own private reserve/bank? This is the philosophy that Live Your Cash is founded on. I am a local business owner named Ronald Palmer and could be reached at 925-331-0824 to speak deeper into this strategy. Also comment below and let me know what your thoughts are.