Pay Yourself First

Hey friends,

This week we are going to talk about a personal finance topic (for you Gearoid) called PYF (Pay Yourself First). The idea is that whenever we get money coming in (eg: salary), we immediately put aside a percentage (eg: 10-20%) for our savings / investments. Only when we've done that do we worry about things like paying rent/mortgage buying food, going out etc.

Here's what JD Roth (writer on the great website Get Rich Slowly has to say on the topic:

When you pay yourself first, you're mentally establishing saving as a priority. You're telling yourself that you are more important than the electric company or the landlord. Building savings is a powerful motivator — it's empowering.
Paying yourself first encourages sound financial habits. Most people spend their money in the following order: bills, fun, saving. Unsurprisingly, there's usually little left over to put in the bank. But if you bump saving to the front — saving, bills, fun — you're able to set the money aside before you rationalise reasons to spend it.

But the PYF mindset doesen't just apply to money.

When going through our to-do list, if we paid ourselves first, we'd prioritise the most important, highest leverage task. Instead we tend to put that off, doing menial things like checking our email, or ticking off the less important activities first.

When approaching the end of the day, if we paid ourselves first, we'd prioritise getting 7-8 hours of sleep, rather than scrolling though instagram or reading philosophy books until 3am.

So I'll leave you with the question - what other parts of our lives can we apply the 'pay yourself first' mindset to?

Have a great week!


My Favourite Things This Week

  1. Tennis Camp - This week I had a tennis camp at the local club which was really fun.
  2. Eating Out - At the start of the week we went for a lovely meal at Hamptons which was awesome and we all had great fun.

Quote of The Week

The cure for pain is in the pain.