The myth
The Pay Yourself First budgeting technique is a popular way of saving and has many fans (including established financial gurus) who swear by its ability to help them put money aside. For them, this is a method that delivers proven results.
That’s why these people believe that Pay Yourself First is the best way to save.
Why do people believe it?
Pay Yourself First is popular because it gives you a little more freedom than many other budgeting and savings strategies. It has helped a lot of people put aside money for a rainy day or future purchase.
To do it, you need to know how much of your monthly income you want to save. Then, when your money comes in, you put that amount aside immediately.
With this technique, you don’t even have to create a detailed spending plan. Once your savings are set aside at the start, the rest of the money is yours to spend as you want. Of course, you need to make all your expenses fit the remaining amount.
Risks of believing this myth
If you assume that Pay Yourself First is the best way to save but it turns out to not be effective when you try it, you may end up with a very casual savings approach, or even give up on saving.
This method has worked for a lot of people. However, there is no guarantee that it will work for you. If it doesn’t, don’t give up! Instead, try other strategies to see which one fits you best, or even come up with your own.
Other saving techniques you can check out include having a forced savings plan (like having automated deductions from your bank account to another account) and taking saving challenges (like setting aside a certain bill denomination for a month).
The strategy you use doesn’t matter as much as its ability to get you to put money aside.
Verdict: It depends.
Pay Yourself First is a good strategy with the potential to help you save money. For some people, it might actually be the best way. But is it the best way for everyone?
Certain people would find it easier to save with a technique that categorizes all income and expenditure. They may prefer a zero-sum budget, in which a role is given to every single peso. Others might get better results with a combination of expense tracking and goal setting. It all really depends on your specific situation.
To find the best method for you, try out savings strategies that you think would work for you and assess after a few months. Looking at real-world results are the best way to see what works best.
Don’t forget, saving consistently and steadily is part of good money management. Getting started is the most important part.
