Pay Yourself First

Interactive Video

[A mother and daughter putting money into a piggy bank.]

Narrator: Why would you pay yourself first? What does that mean?

[A man holding cash and thinking.]

It’s actually a financial strategy you can use to prioritize what you do with your available money. 

[A mother and daughter putting money into a piggy bank.]

It assigns savings as the first thing you can “spend money” on when you get paid.

[An animation of money coming out of a paycheck and moving over to an empty wallet.]

This takes priority before paying anyone else - the landlord, the utility company, the credit card company, etc.

[A clipboard with icons representing paying yourself, housing payments, utilities, and credit cards.]

That may sound counterintuitive because you are always advised to take care of essential needs first. Well, this strategy positions savings as an essential expense.

[A graph with icons for groceries, transportation, clothing, and housing under the essential category. A piggy bank icon under the category labeled ‘other’, moves to the essential category.]

To get ahead financially, saving has to be a commitment, not an afterthought. But saving doesn’t just mean spending less.

[A woman putting money into her wallet.]

It means working toward a purpose, like an emergency fund, an education, or retirement. Pay Yourself First reinforces a savings-first mentality.

[Animation with an umbrella icon, a graduation cap icon, and a graph with a clock icon appearing one after the other.]

Think about these scenarios as if it’s your money. Select an option from each drop-down based on how you’d approach it.

[A woman holding cash and thinking.

These are your typical monthly expenses. Prioritize them based on how you think you should allocate money. Select a number from each drop-down.

Expenses:

rent

electric bill

student loan

savings

dance lessons

Correct Answers: 

Always Pay Yourself First. Then all essential needs like rent, student loans, and the electric bill. Last, pay for non-essential items.

1. savings
2. rent
3. student loan
4. electric bill
5. dance lessons

It’s the end of the month and you have $200 left after paying all of your bills. What do you do with the money?

[Expense ticket showing a balance of $200.]

Option 1: Put it in savings.

Audio Feedback: A great idea - you can never put too much in savings, but…

Option 2: Spend it on something you want.

Audio Feedback: You are certainly entitled to buy things that you want at times, but…

It’s a trick question! Don’t wait till the end of the month to make a choice. Pay yourself first!

[A calendar that has a dollar sign on the last day of the month.]

Saving money first before paying bills may seem unnatural or irresponsible, but it’s actually the way to get ahead financially.

[ Animation: An arm tosses a bag of money onto several other bags of money.]

And think of it this way, when you save first, even if you have an issue paying a bill after everything else has been paid, or if something unexpected comes up, you can go to your savings to help you out!

[An animation of a hammer breaking open a piggy bank to access the cash and coins that are inside.]