More often than not, as expats, we always set our goals or targets of saving. We think that if we could only do it this month or even today and we could maintain it, we can eventually save for whatever plans or purpose we have.
But then, once we receive our salary for the month, we pay our bills, we send money back home, we buy home-related stuff, and voila!
Even before we know it, we do not have the money to save anymore. In this case, you are failing in one crucial aspect of your financial life, paying yourself first. This does not mean that you have to save the money and use it to yourself.
It means that you pay yourself for future purposes, most importantly for emergency purposes. This seems to be a problem being encountered by most, if not all, expats.
We pay so much for others so that we fail to pay ourselves. We don’t even know how to maximize saving potentials while working overseas.
In this article, I will be sharing you more information on why it is essential to make this as a habit. Something that we do day in and day out. Something that we never fail to do in the monthly and even on a daily basis.
1. What is paying yourself first? (Some People Don’t Know This)
I have given you the benefits that you could get out of this habit, but if you are not yet sure what it is really about. Then I urge you to create an action to know this concept better.
To illustrate it fully, try to imagine drinking a glass of water together with a medicine (capsule or tablet). At the beginning of the meal, you drank water. While eating, you once again drank water. And when you’re done with the meal, there is only a remaining 1/3 part of the water, and you will still have to swallow the medicine along with that amount of water.
What will you feel? Painful? Right? You’ll have to get another glass of water so that you could drink that medicine.
That’s the same with paying yourself first. You have your salary, you spend it in doing your responsibilities, and once it is the part that you have to take something for yourself, it is not enough. So, it becomes difficult; it becomes painful. But unlike the glass of water, you could not get another glass!
You only get a salary once a month, and you will have to wait for another month to reach that goal. But then, it becomes a cycle, so much so that you could not save for yourself anymore.
2. Paying yourself first will lead you to budgeting
Budgeting will become an easy task for you if you make it a habit that you pay yourself first before anything else. You won’t have to be worried that a part of your savings will not be achieved since, at the beginning of your total budget, you already separated a portion of it to become your savings.
You will not have to wonder excruciatingly on how you could extract your remaining budget to save because you already prioritized it beforehand. So, budgeting would be as easy as 1, 2, and 3.
3. You will continually fill your saving and investing account
Remember that saving is just a matter of discipline. If you are determined that you will save, then, by all means, you will do everything to achieve that goal. If you promise yourself that you’ll save first before all other financial activities that you plan to do, then you’ll be surprised one day of how much you’ve collected through determination and discipline.
Not only expat but Local should do paying themselves first.
If you are thinking now that this habit is only applicable to expats, then you got it wrong. This habit is useful by all of those who are working or budgeting. The application of this habit is allowed across all jobs and countries. For as long as you want to save, then you can use this habit. Save for yourself, pay for yourself, and wait for the beautiful results later on.
4. For retirement benefits
You won’t be working for the rest of your life. Whether you like it or not your body will eventually force you to stop because it has become tired of working for so many years. What will happen then if you did not save? Will you wait for the monthly subsidies that you get from Social Security System or if you are from the USA it’s ROTH IRA or 401K Retirement saving, or all the other sort of insurances? I hope that the answer to that is no. That’s why in paying yourself first, you prepare for the long-term goals that you have in life, and that includes having a well-off journey towards and during retirement.
Paying yourself first is a habit that we must practice in our daily lives. It may not be easy, but in the long run, all the hard works will be paid off once we’ve seen the fruits of our savings.
Do you discipline yourself to always pay yourself first after receiving a salary? Share your thoughts below.