Paying yourself first regularly is the key to building savings that actually grow. But let’s be real—saving money can feel impossible when life throws a million things at you: school, social plans, new shoes, you name it. Still, if you want to build real financial habits, paying yourself first regularly is the smartest move you can make.
Could you please clarify what that means and how one might consistently adhere to it? Let’s break it down in the simplest way possible: you can start stacking your savings without the stress, so you can start stacking your savings without the stress of forgetting to pay yourself first regularly.
What Does “Pay Yourself First Regularly" Really Mean?
Paying yourself first regularly is built on an investor mentality, focusing on personal finance and retirement planning. It encourages individuals to save money from their paycheck and place it into a savings or investment account before they spend on anything else.
By prioritizing this step, your funds can grow steadily over time. This strategy is designed to make increased, consistent income allocations toward your future goals rather than letting monthly expenses or discretionary purchases take priority.
While this sounds ideal, guidance on this method might not always be realistic for everyone. Data from the Federal Reserve show that many Americans face challenges in building retirement savings or handling near-term emergencies, which often prevents them from sticking to the principle of paying themselves first regularly.
Building Savings
When focusing on personal finance, many professionals and retirement planners recommend this method as an effective way to contribute to savings every month. Over time, this leads to a long-term nest egg. You can use a range of vehicles depending on your financial objectives.
Common approaches include setting a percentage of each paycheck to go directly into retirement accounts like 401(k), individual retirement account (IRA), or even a cash savings account.
This approach focuses on building a retirement account, creating an emergency fund, or saving for long-term goals such as buying a home. Regular contributions also help reduce stress, ensuring that retirement and emergencies can be handled with cash, whether it’s a car breaking down or unexpected medical expenses.
What Percentage of Americans Are Saving Money?
In 2023, about a third (37%) of Americans could not cover a $400 emergency in cash, according to the Federal Reserve report. This figure mirrors 2022, and is higher than 2021 (32%).
Additionally, retirement savings track levels showed that 34% believed they were on track in 2023, similar to 31% in 2022 but lower than 40% in 2021.
The Bankrate’s Annual Emergency Savings Report revealed 27% had no emergency savings. Around 29% had less than 3 months of living expenses, 16% had 3 to 5 months, and 28% had 6 months or more.
Among generations, Baby Boomers led with 46% having 6 months saved, followed by 25% of Gen X, 20% of Millennials, and 11% of Gen Z. This illustrates that paying yourself regularly is not yet a widespread habit.
How to Make Sure You’re Paying Yourself First Regularly
This habit won’t stick unless you make it easy — and honestly, kind of fun. If saving feels like a boring chore, you’ll give up fast. But if it feels simple, automatic, and rewarding, you’ll actually want to keep going.
Here’s how to build a savings habit that fits your life — without stressing or sacrificing everything you enjoy
Set Goals That Actually Excite You
Let’s be real—“saving for the future“ sounds super vague (and honestly, kind of boring). That’s why you need to give your money a mission. What’s something you actually care about? A new house? A concert trip with friends? Building an emergency fund so you’re not panicking when life throws a curveball? Whatever it is, make it your goal. When your goals are clear, it’s much easier to stay motivated and keep paying yourself first regularly.
Expert advice:
Put your objective in writing and keep it in plain sight, whether it’s on a sticky note beside your mirror, on your phone’s screen, or in your notes app. Let it serve as a reminder for you to avoid making that impulsive, haphazard purchase.
Think Short-Term, Plan Long-Term
Short-term goal: Want those sneakers you’ve been eyeing? Set a goal to save $100 in the next 3 months. That’s just $8–$10 a week. Totally doable if you cut back on a few random snack runs, skip one delivery order, or throw in some birthday cash.
The long-term goal is to now zoom out. You could set aside $1,000 over the course of a year to buy a laptop, college supplies, or a trip this summer. That’s around $20 every week. Having a part-time job or a side business can help you reach your goal if you stick to your plan.
Setting deadlines for your savings goals helps you reach them faster. You’ll know what to save for, how much you need, and when to reach your target. It’s not about giving up all the fun; it’s about making smart choices that pay off later.
Adjust as Life Happens
Got a part-time job? That’s your green light to boost your savings. Even putting away a few extra dollars each week can speed up your progress—and you’ll feel good knowing you’re making moves toward your goals.
Hit a tough month? Maybe hours got cut, or expenses popped up. It happens—life isn’t always smooth. And that’s totally fine. Instead of quitting, just scale back a little. Save less for now, and pick back up when you can.
The important thing is not to be perfect, but to be constant. Being able to bend is your secret tool. Saving turns into a real habit when you learn to change things without giving up. Your financial skills improve the longer you practice..
Make Paying Yourself First Regularly a No-Brainer
The best way is to make sure you’re paying yourself first regularly. Automate it so it runs in the background. Use your bank app or a savings tool to move money every time you get paid. That way, you won’t even have to think about it.
If you run a small business or sell crafts online, paying yourself first regularly means transferring a fixed percentage of your earnings into savings before spending on supplies. Automating this saves you from accidentally spending your profits.
Use Automatic Transfers
Most banks (and even some apps like Cash App or Chime) let you set up automatic transfers. So instead of relying on willpower, just tell your money where to go. Every time you get paid—whether it’s from a job, allowance, or gift—have a set amount move straight into savings. Even $5 makes a difference.
Pro move:
Schedule the transfer to happen right after your paycheck lands. That way, the money’s already saved before you even get a chance to spend it. Out of sight, safely saved.
Try Apps That Save For You
Apps like Chime, Qapital, or Digit make saving feel almost effortless. You don’t need to remember anything—the app does the work for you.
Here’s what they can do:
- Round up your purchases: Buy something for $3.50? The app rounds it up to $4 and saves the extra 50 cents.
- Save when you spend less: Didn’t order takeout this week? The app notices and moves a few bucks into savings as a reward.
- Set custom rules: Want to save $10 every Sunday or every time you hit 10,000 steps? Yup, that’s a thing.
It’s basically saving without even trying. And the best part? You’ll barely notice the money is gone—until you check your balance and realize how much you’ve stacked up.
Ready to take control of your finances? Explore these practical budgeting guides tailored for students:
The Bottom Line
Once you’ve paid yourself first, the money goes into savings before you spend it on monthly living expenses or discretionary purchases. Over time, this account becomes a powerful future financial buffer for emergencies. However, staying realistic is key—if you don’t earn enough money to save before bills, start small. Building this habit is a core part of paying yourself regularly.
Level Up Your Money Game by Paying Yourself First Regularly
Think of paying yourself first regularly as leveling up in a video game. Each pound you save acts as experience points. Reaching your mini-goals are your achievements. A finance expert is not needed to create effective habits; all it takes is the willingness to take command of your finances, step by step.
Don’t stop. Maintain your savings. A healthy financial future offers you options for your life.
“A penny saved is a penny earned.”
— Benjamin Franklin
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