Free of charge: 5 tips - secrets to help you bank more money
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for the person who works the hardest and has taken all the risk –
John himself! On top of this, when cash flows are tight this problem
is exacerbated further...John ends up with nothing. The solution is
actually simple; John needs to pay himself first then pay his bills
otherwise he will struggle to keep any for himself and his family's
wellbeing.
Even if we don't own a business we may do a similar thing with our personal
finances. When it comes to pay day we may pay everybody else first (our rent,
power bill, phone bill, the owner of our favourite retail store) and then pick up the
scraps at the end (if there are any).
The key is to pay yourself first, then pay everybody else – WE CAN DO BOTH!
Too many people fail to 'squirrel away' money for themselves, instead they pay
their bills, play, buy some toys and then try to save what is left over.
Unfortunately it doesn't work so well this way!
Let's be clear, it is right, fair and honest to pay our bills, this isn't up for
negotiation! It is simply a matter of paying our bills AFTER we have paid
© Steve Chitty 2011
18
ourselves a fair and honest income or saving. Like a business owner, we need
to be at the front of the queue when our own money is being allocated rather
than at the end. The way we need to approach the Pay Yourself First principle is
to value ourselves as the key manager of our resources rather than seeing our
self as powerless to create change amongst all the financial demands we
experience.
© Steve Chitty 2011
19
HOW DOES IT REALLY WORK?
Paying Yourself First
DOES Mean
Paying Yourself First
MIGHT mean
Paying Yourself First
DOES NOT Mean
ı Drawing your income
or savings at the start
of your AIP not the
end.
ı Knowing what is a fair
and realistic amount
to pay yourself.
ı Honouring yourself
and your family (they
need you to earn and
grow your money).
ı Being creative and
channelling energy to
solutions that help
you pay your bills.
(Creating then filling
the vacuum).
ı Paying your bills on
time!!
ı Paying off high
interest debt before
saving.
ı Paying off your
mortgage first.
ı Stress – stress can
force us to be
creative, work harder
and to put positive
pressure on
ourselves.
ı Asking for help – from
your financial adviser,
accountants, mentor,
friends (make sure
they understand the
Pay Yourself First
principle though).
For Business Owners
ı If you are in business
you may take a low
income in the early
days of your business
or at various points in
the lifecycle of your
business.
ı Reinvesting or loaning
money back into your
business at times.
ı Being greedy
ı Being unrealistic and
paying yourself
unsustainable
amounts.
ı That your favourite
cause misses out. (I
actually advocate
Paying Yourself First
after you have given)
Paying yourself first is probably the best way I know to ensure we keep more of
the money that comes our way. At times it will appear that we can't afford to pay
ourselves first, but the truth is we can't afford not to!
© Steve Chitty 2011
20
If you are not already paying yourself first, I encourage you to begin now!
Implement an AIP that works for your circumstances. If you are not saving…start
now! If you are in a business start taking an income. If your cash flows are tight,
pay yourself something just for principle's sake – it might be a small amount for
now but pay yourself something. This is an important mindset to develop
because it places value on you and will keep you moving forward in your financial
future. With time you can increase the amount but start with something – create
the vacuum!
Bloody Money?
I once spoke to a woman who had attended a conference run by Tear Fund, a
charity that helps people living in extreme poverty. One of the speakers at the
conference was a very successful businessman who now worked full time
generating income for Tear Fund. This man shared that over the years he had
learned that "money is like blood and we need it to have a healthy
Unformated preview of the document: '5 tips - secrets to help you bank more money': Part 1, Part 2, Part 3, Part 4, Part 5, Part 6, Part 7, Part 8