Investment Principles Everyone Should Know: No. 2 Pay Yourself First

This series will present fundamental principles everyone, especially the young, should know when it comes to personal finance.

Pay Yourself First

Most people would pay everyone else before paying themselves.  At the end of the month, they hope that some money will be left over to put towards savings and investments.  However, this rarely happens.  Paying yourself first means putting a percentage of your paycheck into savings or investments the moment you receive it and before you start paying bills, going grocery shopping, filling your gas tank, etc.  If you do this, you will never go a month without saving money!  At the end of the month, you will probably spend all your money, but the savings will already be safe in the bank.


The easiest way to do this is to set up an automatic fund transfer on the days you receive your paychecks.  This way you won't even realize the money is gone.  You'll budget and spend according to the balance indicated in your ATM/Payroll account.

Read more about "Pay Yourself First."

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4 comments:

  1. hi. I'm coming up with an online library of all pinoy blogs related to finance. I came across your blog and included it in the list. I hope you don't mind.

    on October 17, 2008 at 1:16 AM  


  2. Sun Jun said,

    @ pinoy investor

    thanks for dropping by. I don't mind it at all. Good luck to your project.

    on October 17, 2008 at 1:25 AM  


  3. yvon said,

    good day. I am currently following this principle..

    INCOME - SAVINGS = expense.

    on October 22, 2008 at 12:28 AM  


  4. Sun Jun said,

    @yvon

    that's good to know ^^
    keep on it and you'll be saving more ^^

    on October 22, 2008 at 12:10 PM