Automatic saving: How to "pay yourself first"
💡 Quick Tip
Revolutionize your savings with the "pay yourself first" method. Discover how to automate your finances to guarantee you set aside a percentage of your salary before you start spending, making saving an infallible habit.
The traditional saving mistake
Most people operate under this formula: Income - Expenses = Savings. They pay bills, dine out, and save whatever is left. The problem? Nothing is ever left. The brain is wired to consume all available money.
Changing the formula: Pay yourself first
The golden rule of wealth changes the equation: Income - Savings = Expenses.
You are your most important creditor. Before paying rent or groceries, separate the money for your future. This money is untouchable and leaves your checking account the day you get paid.
How to automate the system
Willpower depletes, so the system must be automatic:
- Open a second account: A separate savings account, preferably at another bank without a debit card.
- Set up an automatic transfer: On payday, a fixed amount (e.g., 10%) automatically transfers to savings.
- Live on the rest: Your main account balance is your real budget. You will naturally adapt to spending only what you see.
📊 Practical Example
Practical example with real numbers
You have a net salary of €1,500. Until now, you tried to save what was left at month-end, but always hit zero.
You apply the method and program a 10% automatic transfer (€150) for payday.
The next day, you see €1,350 in your bank app. Your brain assumes this is your total money for the month. You will adjust your dining out to those €1,350 without realizing it.
After a year, without feeling deprivation, you will have €1,800 set aside in your secondary account. It is the perfect start for an emergency fund or investing.
