Pay Yourself First, Not Last, And Create The Lasting Wealth You Need

As human beings, our lives are often driven by habits. Bad habits can often keep us from
reaching our full potential. While good habits, when properly applied, can transform our
lives. Habits can often dictate the difference between success and non-success.

When it comes to our finances, the key point here is to pay yourself first, and then pay your
bills. Most Americans do the exact opposite. They pay their bills and try to save whatever is
left over, which in many cases is very little if anything. It all starts with an abundance
mindset while many people exhibit a lack mindset.

Whether you are saving for an emergency fund, a down payment on a home, starting a
Christmas or holiday savings plan, or savings for retirement, pick a set amount and have
that go into your funds first before you pay a single bill.

Savings first, spending second. These are not bills but investments in your future.

This plan uses a system and automation to beat willpower and emotions and impulse
purchases or spending. One of the biggest advantages of paying yourself first is that it fits very well with automatic transfers, recurring contributions such as 401ks, and direct deposits.

With these deposits occurring systematically, and periodically on a timely basis, it takes you having to decide out of the equation and it becomes a habit. After a period of time you won't even notice these funds that are paying yourself first and you are on your way to creating wealth for yourself and your family.

Another advantage is that it allows you to start with relatively small amounts on a periodic,
typically monthly basis. Time is a key component here. The more time you have to grow
your wealth. The larger your end result will be. Start with something, even if it's small. You
can raise the amount over time.

Give yourself a mental advantage. When I talk to many people regarding budgeting, it often
has a negative connotation. I'm tightening the belt too tight. I'm not enjoying life. However,
instead of being overwhelmed by budgeting, pay yourself first can work as a much more
simple alternative. Set your savings amount first, systematize or automate it and live on
what remains.

I'm a big advocate of the KISS plan. Keep it simple and sincere. Paying yourself first is a
simple, straightforward, and effective way to create wealth for your future self, which
allows your present self to enjoy life and have the lifestyle you want without being stressed
out by not having enough savings for your future.

About Stephen

Stephen Dissette is an investment advisor representative with Horter Investment Management. He is a graduate of Northwestern University and served as an officer in the United States Navy. As a young boy, Stephen watched his grandfather work until his final days, unable to retire. His father also had to work into his 70's. This personal experience ignited Stephen's passion and desire to help guide pre-retirees and retirees towards their preferred financial future. (Credit: Stephen Dissette)

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