The pay yourself first strategy focuses or places more emphasis on setting aside money to save, especially for long-term goals, so that the future or old age will be more financially secure. A person does not need to worry about retirement because he already has adequate retirement savings. Of course, this amount of savings is a long-term effort or the result of hard work collecting money over many years.
To be able to implement the pay yourself first strategy, you have to change your mindset and consider the amount of money you have to save as a fixed expense or even a basic need that cannot be postponed. So when preparing a budget you can group savings into fixed expenses such as paying monthly bills. So that when you receive payment or salary, the savings money has been set aside like monthly bills and made the main priority before other expenses. Here are several ways to implement the pay yourself first strategy:
1. Separate savings needs
Always remember that the pay yourself first strategy is to focus on setting aside income at the start of receipt, so that it is not used for other purposes. It's best to separate several types of savings, such as separating emergency fund savings from retirement savings.
2. Start with a small amount/percentage first
If you are not used to or have the discipline to save money, then there is no harm in starting with a small amount first. The most important thing is to increase discipline and save regularly. As time passes, the amount of savings can be increased little by little until it reaches the specified target.
3. Automate savings
Set the features on your mobile banking so you can make regular transfers to your retirement savings account and emergency fund account.
To be able to implement the pay yourself first strategy, you have to change your mindset and consider the amount of money you have to save as a fixed expense or even a basic need that cannot be postponed. So when preparing a budget you can group savings into fixed expenses such as paying monthly bills. So that when you receive payment or salary, the savings money has been set aside like monthly bills and made the main priority before other expenses. Here are several ways to implement the pay yourself first strategy:
1. Separate savings needs
Always remember that the pay yourself first strategy is to focus on setting aside income at the start of receipt, so that it is not used for other purposes. It's best to separate several types of savings, such as separating emergency fund savings from retirement savings.
2. Start with a small amount/percentage first
If you are not used to or have the discipline to save money, then there is no harm in starting with a small amount first. The most important thing is to increase discipline and save regularly. As time passes, the amount of savings can be increased little by little until it reaches the specified target.
3. Automate savings
Set the features on your mobile banking so you can make regular transfers to your retirement savings account and emergency fund account.
