The Golden Rule: Pay Yourself First

If you’ve ever read any personal finance-related books, you’ve probably come across the term “pay yourself first”. It’s pretty much the golden rule when it comes to personal finance, but what does it really mean and where do we even start?

Within the next few minutes, you’ll learn what it means to pay yourself first, why you should, and what you can do to start paying yourself first!

What does it mean to pay myself first?

Paying yourself first doesn’t just apply to those who are self-employed -  to pay yourself first simply means to pay a portion of your income to your future self. Whether it’s transferring money into your savings account, retirement plan, any investment vehicles, or repaying your debt, it’s ensuring that you’re contributing to your financial security before spending on anything else.

Why should I pay myself first?

Paying yourself sets you up for financial security in the future by consistently saving, and promotes good money management. As the saying goes “if you can't manage £1,000, you won’t be able to manage £10,000” and so on, so paying yourself first gets you into the habit of putting your money aside no matter how much you’re earning. 

As time goes on and your savings grow, you’ll feel secure knowing that you have a cushion of money to cover you, should anything happen.

Sounds great, but where do I start?

Out of sight, out of mind

Automate your savings so that every time you get paid, a small percentage of your income will go automatically into your savings account. This way, you won’t even have to think about it and you’ll begin to treat your savings as if it were a bill you have to pay.

Start small

You don’t need heaps of money to be able to save. Start with what you feel comfortable with at first, you’ll be surprised at how much even £10 a week (which we’d easily spend on one night’s takeaway) can compound into. Once you’ve gotten into the habit of paying yourself first, you can begin to save more. However much you decide to start with, remember the earlier the better!

Adjust your budget

One of the benefits of paying yourself first is that it forces you to re-evaluate your spendings. Because you’re setting your money aside first thing, you’ll have to readjust your budget to ensure you’re still able to cover all your necessities. This will cut down your budget for non-essential spending, as you’ll have less money to spend, and will therefore need to be more mindful of where your money is going. 

Read our budgeting blog to know more about the ins and outs of budgeting!


It can be tempting to dip into your savings, especially when you start seeing your money piling up, but don’t. Remember that this is all for your long-term gain. Trick your mind into thinking that the money isn’t even there or that it isn’t yours - after all, it’s for the future you! 

As you begin to save consistently, you’ll start to accumulate more and more, and your future self will have a lot to thank you for! 

The following is for general information and is not intended as a form of financial advice by Finndon or its representatives, nor the information intended to be relied upon by individuals in making any financial decisions.