Pay Yourself First: The Key to Financial Freedom

• By Clinton Wanjala

• 525

• Last updated Sep 20, 2025

Paying yourself first is a habit that can change your financial life for the better. It’s actually very simple, when you make money, lets say through income, you save and invest part of this money first before spending on any other bills. I like referring to this particular habit as making yourself the first bill. 

By doing this, you make sure that your future self is taken care of before you handle other bills or expenses.

The biggest benefit of paying yourself first is that it helps you build financial security. After paying yourself first, you'll always be certain that no matter what, you’ve already saved money. 

Along with that, it also reduces money-related stress, helps you improve your spending habits, and most importantly, it enhances your ability to grow your wealth.

When you get into the routine of paying yourself first, you’re not just saving; you’re investing in a more secure and financially free future.

Why Pay Yourself First?

It is a common norm in the society that we should pay our bills and cover all our expenses before saving the leftover. However, things need to change, you should always come first.

 When you pay other bills than you first, there are high chances that there will be little or no money remaining to save or invest thus leading to financial instability. If you choose to pay yourself first, the script if flipped and you will determine how much you want to save or invest and even both.

How to Pay Yourself First

1. Pay yourself First by Automating Your Savings: If you want to pay yourself first, one of the best strategies is automating your savings.

You can set up automatic transfers from your checking to your investment or saving accounts. Automation will help you eliminate the temptation of spending the money thus making saving a seamless facet within your financial routine.

2. Determine a Fixed Percentage: another way you can be paying yourself first is by deciding on a fixed percentage of the money that you make that you will save or invest each month.

This could be any figure for instance, 10%, 20%, or whatever percentage that fits your financial situation. You don’t need to save much, what you only need is consistency and growth. Over time, even small percentages can grow into substantial savings.

3. Prioritize High-Interest Debt: If you have high-interest debt, such as credit card debt, pay it off first, followed by your savings. High-interest debt can quickly destroy your financial success, so it's critical to address it aggressively while also saving for the future.

4. Set Clear Financial Goals: Having clearly defined goals might help you stick to your savings plan. Whether it's creating an emergency fund, saving for a down payment on a house, or investing for retirement, understanding what you're working toward can help you stay focused and disciplined.

The Advantages of Paying Yourself First

Paying yourself first has many benefits:

• Financial Security: By constantly saving and investing, you can create a financial cushion that can protect you in times of need while also providing for the future.
• Reduced Stress: Paying yourself first will help reduce stress. This is how; knowing you have money set up for emergencies and long-term goals can greatly alleviate financial stress and worry.
  
• Wealth Building: Compound interest from the money that you save in an MMF or fixed deposit account allows you to grow your savings and investments over time. This can result in significant wealth gain and financial freedom.
• Improved Spending Habits: Prioritizing savings makes you more conscious of your spending. You'll become more aware of where your money is going and make more informed financial decisions.

In conclusion, paying yourself first is a simple but highly effective technique for gaining financial independence. Making savings and investing a key priority will help you build a solid financial future and enjoy the peace of mind that comes with knowing you're in charge of your finances. Begin today and watch your financial situation improve substantially.