"Pay Yourself First" is the budgeting strategy where you will save at first and then use the remaining amount for expenses. It is different from other budgeting techniques because here you prioritize saving over other things. For beginners, it is suggested to start with the 50/30/20 rule of budgeting but if you are doing it well then the next hop is to go with pay yourself a budget.
PC: Pixabay.com
in this type of budget, you will save on the first day of the month if your income cycle is monthly and thus use the remaining amount of expenses or needs wherever you want to do. It is good for creating wealth because you know your first priority is saving and investing and once that is done your next priority is to use the income for other things. When you have that mindset it will be much easier to get to your goals.
Starting with Pay Yourself First is quite easy, here you will decide how much you will save per month like 30-40% of your income and then you can set up an automatic transfer which will reach your savings account and eventually get invested. This is the best way to budget for staying focused and motivated and creating the wealth you want for yourself.
You might ask how it is different from the 50/30/20 rule because there also you are saving 20% of your income. In the 50/30/20 rule, you are dividing your income by expenses, needs and savings true, but here you are actually saving first which can be 20, 30 or even 40% of your income and thus the remaining amount should be used for the expense or needs. And thus you are actually prioritizing your savings here in this type of budget. There is a mindset change because, in the 50/30/20 rule, the mindset is to do everything whereas here the mindset is to save first and the remaining should be used for other things.
This mindset is needed for the goals you have set for yourself. Because if the goal is bigger than the mindset should be to chase that goal rather than just sitting and hoping that your goals will be reached.
Posted Using LeoFinance Beta
The rewards earned on this comment will go directly to the people( @codingdefined ) sharing the post on Twitter as long as they are registered with @poshtoken. Sign up at https://hiveposh.com.
Pay yourself first is one of the great tips to make the most of your savings power.
Great post!
Congratulations @codingdefined! You received a personal badge!
Participate in the next Power Up Day and try to power-up more HIVE to get a bigger Power-Bee.
May the Hive Power be with you!
You can view your badges on your board and compare yourself to others in the Ranking
Check out our last posts:
Support the HiveBuzz project. Vote for our proposal!