What does the principle of "Pay Yourself First" entail?

The principle of "Pay Yourself First" entails saving or investing a portion of your income immediately upon receiving it, ideally before any other expenses are paid. This strategy emphasizes the importance of prioritizing savings and investments as a non-negotiable part of your financial plan, helping to foster a habit of saving consistently over time.

Choosing to save or invest 5-10% of your paycheck right away ensures that you are creating a financial cushion or growing your investment portfolio rather than being tempted to spend that money elsewhere. By treating savings like a recurring expense, you make it part of your financial routine, which is crucial for long-term financial stability.

This proactive approach to personal finance helps to build wealth more effectively than waiting until after bills are paid or only saving when there are leftover funds, which can be unpredictable. It underscores the idea that savings should be prioritized in order to reach financial goals and maintain financial health.