Financial Health: Paying Yourself First
- 4 days ago
- 2 min read
Our finances are the lifeblood of everything we do. Not enough money flowing through, and the whole system can fail or at least feel pretty terrible. We've all seen those smug TV programs where people have accomplished wonderful things by skip diving or living on a barge. Our finances can be the thing that causes the most stress in our lives and can make us do things we don't want to do just to stay afloat. Sometimes, drastic action is required.
If you have regular income, one of the soundest things you can do is pay yourself first. We're not talking about that 14th handbag you have your eye on or that Porsche you've always admired. It's the little incremental changes, ones you can do now. You won't feel the effect immediately, but it will work, a bit like taking a vitamin pill, only for your financial health.
The nuts and bolts of the practice are that you take 10 percent of everything that comes in as income and push it straight out to a savings fund. You do that each time money comes in so that you don't see it, mentally spend it, or have real access to it. You'll feel the impact a little at first, and you might need to start with a lower percentage and work up to 10 percent. Or you might want to cut down on something to help you achieve it, but the effects are well worth trying.
I started to do this in 2018. I've not always managed to achieve it, but I've never dipped into the money, other than to invest further, and as a result, I now have a modest investment fund.
To get started, check out the best savings rate you can get and apply, today.* Then calculate when your money comes in and how much you receive, set a standing order to your new account for 10 percent* of the total coming in, check it's working, tweak as necessary and then leave it for a year.
Don't do it based on your gross income, or if it's business related and you have some costs to take off, take them off first. This is 10 percent of what's left after expenses, your net income. Your standing order should go out the day after it comes in, so that your bank doesn't try to take out the money before it comes in. If something goes wrong you have a day to find out what and fix it before things get complicated with the bank.
You'll be amazed how having a little fund put aside changes your attitude to so many aspects of your life, never be tempted to give away your pot to someone else, instead show them how to create there own.
*If you are not sure how to calculate 10 percent look at your amount and move the decimal point one place to the left so £100.00 becomes 10.00 £7245 becomes £724
This article is not financial advice always seek professional advice if you are struggling financially and do pay your bills! If you want to look for the best savings rates etc I find MSE to be a reliable source of information.
Financial Health: Paying Yourself First - created 19.10.25
