Another Christmas has passed. You focused on everyone else, made sure they had what they wanted or needed, and now you’re ready to begin a brand new year. As you do, now is the time to start thinking about yourself, what your needs are and how you can gain a little more Freedom in your own life.
In this video, I’m sharing the story of the first time I Paid Myself First. Pay Yourself First is an important concept–one that everyone should take with them into the New Year.
On my way home one day, back when I was working in real estate, I was listening to educational CDs in my car. One of the keynote speakers was talking about how the majority of people are employed, trading their time for money, working for other people. These people work hard all month long, and at the end of that time, they’re handed a paycheck. Right then, they start giving all that money away. To housing payments, utility bills or maybe that brand new stereo system they’ve had their eye on. But no matter what, the money is going to somewhere and someone other than them.
This is not the way to become Financially Free.
Why will they never reach Financial Freedom this way? Because they’re giving all their money away! They’ve worked hard, given up their time in exchange for the money, but how much of the end result do they end up with? Usually none! Some even end up with negative money each month, because they keep going into more and more debt!
Worse yet, they’re not investing in their Future Selves. Their money is out working for other people, but they’re back at square one the next pay period. And then they do it all over again the next month. Does this remind you of anyone? Does it remind you of…YOU?
The FIRST person you pay every month has to be YOU.
I don’t mean taking a portion and going out to “treat yo’self”—although that’s an important part of what we teach in Financially Fit Bootcamp. What we mean is giving a portion of that money to your Future Self before you pay anyone else.
By the end of my drive home, I knew I had to take action on these four steps:
Step One: Pay Yourself First
Decide how much your Pay Yourself First amount can be. For me, that amount was 20%. Set up your account so that amount gets transferred directly into a separate savings account after your paycheck has been deposited.
Step Two: Give To Others
Pay a percentage to charity, remembering that what you send out will return to you tenfold.
Step Three: Set Aside for Your Education
Allocate a percentage to furthering your education and development. This is another way to contribute to your Future Self.
Step Four: Connect With Mentors
Take a mentor out to lunch every single month, and use a percentage of your income for that. Surround yourself with people who (right now!) are more successful than you. You’ll get the benefit of their wisdom simply from making the effort to develop the relationship.
These ideas hit home for me. I started abiding by these principles, especially the first one. So when I first met Tony, I had been Paying Myself First for about a year.
I was in the audience at his second ever seminar. Much of that seminar touched on things I was already doing—fortunately!
But there was one crucial point Tony made that struck a particular chord with me. He spoke about making sure you have an Emergency Buffer, a safety net of about three months expenses set aside for security.
This was a concept I understood firsthand. Having recently been ill and unable to work for about a year, I would have been in big trouble without the Emergency Buffer I’d been sending money to for about a year before that.
But there was something more in that seminar, something that Tony stressed, and that I hadn’t thought about until that point.
One of the key aspects of Paying Yourself First is doing it automatically. Instead of sitting down every month, figuring out percentages and manually transferring funds from account to account, get the entire process automated. So when your paycheck lands in the account, the percentage you’ve set out for yourself automatically goes into your Pay Yourself First Fund.
This may seem like a small change from the way I was doing things, but it actually made a huge difference. Not only did I free up some extra time for myself, but I also started paying myself a bit more every month. Automating the process just made it that much easier to set aside a little more.
I encourage you to start the New Year off right by Paying Yourself First. There’s no better way to do it than participating in the Pay Yourself First challenge in Financially Fit Bootcamp. All you have to do is follow these simple steps:
- Choose to Pay Yourself First, and set a percentage you’re comfortable Paying Yourself;
- Set up the separate account as your Pay Yourself First Fund, and set restrictions on it so you can’t withdraw; and
- Get it automated! Once you’re set up, you won’t have to think about Paying Yourself First ever again.
This year, focus on yourself first, make sure you have everything you want or need, and start Paying Yourself First. This is really the only way to Protect Yourself, and make sure your money is working for you before anyone else.
What was your first experience Paying Yourself First?
Makaylah Rogers is the co-founder of MindShift.money. She is a Thought Leader for her generation, teaching people how to rewrite their “money rules.” With an extensive background in wealth building and personal development, Makaylah’s path has taken her into executive roles in various fields including launching startups, real estate sales and motivational keynote speaking.