Pay Yourself First 

Are you saving regularly?

Many people never save because they think it is too complicated, but the concept of saving is really quite simple.  Developing the discipline of saving is what takes a little work.  

The three reasons I hear most for not being able to save are: I don’t make enough, I’ll save what’s left, and I have too much debt.  

Do you relate to any of these reasons for not saving?

Let’s examine these excuses together, one at a time, and find out how you can start to pay yourself first.  The good news is that You can begin to save now, today, because paying yourself first is a mindset and a habit that has nothing to do with the size of your paycheck.  

Reason #1: I don’t make enough money…

There are two kinds of people – those who save now and those who wait. The employee who makes $2,000 a month and gets in the habit of putting $50 of it away will have $600 saved by the end of the year. The same employee who waits until they can “save more” will have $0. And after 10 years, they still won’t have anything saved, and will still be waiting to have enough to save.    

Are You Playing the “When I/Then I” Game?

It goes something like this… “When I can save $200 a month, then I will start to put away money for the future”.  The problem with this game is that it rarely, if ever works and our nature is to always create the next “When I/Then I” scenario instead of developing the habit needed to be successful with money.  

Get into the habit of setting aside a portion of what you make now.

 It doesn’t matter how little, it can be $5 or $5000. The important thing is to get in the habit. If you can bump up that amount annually by at least 3% or $25 a check as your pay increases, and in ten years, you’ll be saving at least $250 a paycheck. But it will never add up like that unless you get started.  

 Reason #2 I’ll save what’s left…  

And typically what’s left is nothing. It happens to everyone. Saving won’t happen if you approach it this way. It is human nature to spend what is there, so don’t even give yourself the option. Take out the amount first, before you’ve even see it. Have it automatically deducted if you can, and put it into a separate account. Once you get in the habit of doing this, you won’t even miss it.   

Put it on Auto Pilot For Success

To be successful at paying yourself first make savings automatic.  Your company’s 401k, 403b, SEP, or other retirement plan can deduct a percentage of your income pre-tax from your paycheck.  You can set up an automatic draft to fund after tax savings like ROTH IRAs, brokerage accounts, and savings accounts.  You have to plan for real life  and can set up automatic drafts to fill up separate buckets for emergency savings, car fund, house maintenance.   

Reward Yourself to Stay on Track

All of this automatic saving is great, but if you want to stay on track you have to build in some rewards for all of your disciplined hard work.  Most successful clients build in buckets or automatic accounts to fill up for things like a road trip to see the grandkids, an annual trip to Vegas, or a deep sea fishing trip with the guys.    

Remember, financial success is about living well.  These memorable experiences are priceless and need to be planned and saved for or else we are right back to playing the “When I/Then I” game in this area as well.  

 Reason #3 I have too much debt…

The truth is those that have the discipline to pay themselves first get out of debt faster.  

 Debt won’t go away unless you pay it off and nothing will get saved unless you start now. So split the difference. Come up with a formula that works for you.   People that have a succesful relationship with money create a formula using these 4 components:  


1.      An amount you can live off – 70%  

2.      An amount to save – 10%  

3.      An amount to go towards debt – 10%  

4. An amount to give away – 10%  

If you need every penny, the breakdown can be 97%, 1%, 1%, 1%.

What happens when the debt is gone?  You’ll be able to increase your savings without having to change your lifestyle or spend a penny more.  

Paying yourself first puts the focus where it should be – on the person whom the money was meant to serve. In my experience, it is never the behavior of the investment that makes the difference so much as the behavior of the investor.  

You are the most important asset that you have. Take care of yourself. It might be hard at first, but getting into the habit now will result in easier saving tomorrow. This is one of the core principals necessary to building a RichLife. It is my most sincere hope that you achieve yours.   

What is your biggest obstacle when it comes to paying yourself first?  


About Beau Henderson

Beau Henderson is a financial advisor, author, coach, radio personality, and CEO of RichLife Advisors. He has helped over 3,000 clients to not just improve their relationship with money, but to live the life of their dreams.


  1. Nancy on February 17, 2011 at 2:58 pm

    Something that helped me get in the habit of saving was my bank! They offered this “pay to save” program where every time I used my ATM card, $1 would go into a savings account. I was amazed at how those added up, and it encouraged me to want to save more.

    Great advice, Beau.

  2. Susan McKenzie on February 17, 2011 at 3:24 pm

    Beau, this is such simple do-able advice…. I’m going to save it… it really should be part of the financial legacy we pass down to our children! Thank you!

  3. denny hagel on February 17, 2011 at 4:08 pm

    Saving is always tossed in the “do it later” basket…but this has given me some real food for thought. I am a real supporter of self-care and it should definitely cover our financial care as well! Thanks for this eye-opener Beau!

  4. Beau Henderson on February 17, 2011 at 4:19 pm

    Great point Denny. Pay yourself first is about so much more than money. I was reminded today that scheduling time to go to the gym in the morning is another way of paying yourself first…

  5. Claudia Looi on February 17, 2011 at 4:27 pm

    Valuable content and lesson for all of us, young and old, Beau. I like the 70/10/10/10 rule.

  6. Chaz on February 18, 2011 at 12:12 am

    Beau, Best thing I did was start to do it. I was afraid 10% in a 401K would hurt so built up to it adding to get to 10%. Now I take my check and my direct deposit gets split into two banks with a portion to savings in each one. The goal is to get to 60% or less. It’s one of those thing if I waited to have , I ‘d have never started. This year since starting in mid January I am seeing the progress and have stash sitting and growing every two weeks.

  7. Amity Hook-Sopko on February 18, 2011 at 8:07 am

    My dad taught us to “save it before we saw it,” and it works. You don’t even miss it. And then when you watch the savings add up, it’s such a great feeling of being ahead of the game!

  8. Sharon O'Day on February 18, 2011 at 8:46 am

    Beau, from the work I do with women who haven’t started saving yet for their later years, I know how empowering it is to see a few dollars saved in an account somewhere. Just seeing it in black and white on a monthly statement. That act alone represents having control over one’s future. And, somehow, money attracts money … and they start finding creative ways to add to that balance. Great article!

  9. Beau Henderson on February 18, 2011 at 10:03 am

    Excellent strategy Nancy. Automatic makes it so much easier…

  10. Beau Henderson on February 18, 2011 at 10:05 am

    You are right Susan. A true legacy is so much more about the wisdom, skills, and heritage you pass on than the money. In fact, when you only pass on the money, it’s almost certain to not last.

  11. Ronke Alao on February 18, 2011 at 11:04 am

    Beau, you said it all. I gave myself all the excuses and it never worked. When I started living on $70%, I found the formula works like no other. It’s empowering to save. Thanks

  12. Debra Pickford on February 18, 2011 at 2:52 pm

    So many people can’t think past the numbers on their paychecks to even develop a savings plan. Nice job breaking it down and given them a simple, doable plan.

  13. Carla J Gardiner on February 18, 2011 at 4:10 pm


    This is great advice. We used several of your tips years ago and have taught our kids the same. One simple way we put away for our kids involved our kids. When we took the recycling in for redemption, we took the earnings straight to the savings account that day. Those funds then grew and we transferred them to mutual funds when we had enough for the minimum deposit. Eventually they were able to buy their first car with that money. It wasn’t out of our pocket or budget either.

    Another way to not bother the budget was to add another source of income. I’ve always had some form of additional income to fund our retirement accounts. The major boost in the arm or should I say IRA account was when I sold insurance and investments. We lived on the insurance commission and invested the earnings, 100% of them, from the investment sales. Neither of these savings plans bothered our budget.

    Today I am thankful for those investments. They are helping us out in a time of need. Good thing we put back for that rainy day.

  14. Annemarie Cross on February 18, 2011 at 4:12 pm

    Beau, this is a great article. Thankfully my parents followed a very similar formula – always making sure they paid off their debt while having enough money to live off and putting some aside in their savings. Seeing this modeled I’m now doing this myself as well as sharing it with my children in the hope that they too will save regularly. Thanks for sharing Beau!

  15. Sean Smith on February 21, 2011 at 3:20 pm

    Brilliant article, Beau. I agree wholeheartedly that those are the 3 main reasons we don’t pay ourselves first, and you took each one of them away. Well spoken.

    Sean Smith

  16. Sean Smith on February 21, 2011 at 3:21 pm

    Brilliant! You took the 3 biggest reasons away from us. Well said, Beau.

  17. Beau Henderson on February 21, 2011 at 6:53 pm

    Wow Chaz, great work! You fill have serious financial freedom with those ratios…

  18. Beau Henderson on February 21, 2011 at 6:55 pm

    Amity, that goes back to what Susan was talking about as part of a legacy… The principle is one of the best gifts we can give our kids. It will last a lot longer than leaving them money for sure 😉

  19. Beau Henderson on February 21, 2011 at 6:57 pm

    Yes Sharon! The discipline leads to momentum and all of a sudden we have a positive relationship with saving.

  20. Beau Henderson on February 21, 2011 at 6:59 pm

    Nice work Ronke, by living on 70% you are ensuring yourself a bright financial future. The sad truth is the majority lives on 120% of thier income…

  21. Sharon on March 13, 2011 at 2:47 pm

    I have been guilty of the when I/then I game for sure. Your post has definitely given me some food for thought and I am now looking at ways to make the necessary changes. Thanks!

    Sharon Worsley
    4 Diamond Leader™

  22. Jon C on November 17, 2011 at 12:05 pm

    My biggest obstacle was remembering to actually do it!  It's much harder to 'make up for last month' by putting away 20% of next month's paycheck.  So I went to my bank to set up an automatic transfer to my savings account every month on my payday.  Don't even realize it's gone now!

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