what is pay yourself first 
 pay yourself first is an investor mentality and phrase popular in personal finance and retirement planning that encourages you to save money before you spend it if you direct some of your paycheck to a savings or investment account that is pay yourself before you do anything else with that money your savings will grow however this guidance isn t realistic for everyone building savingsmany personal finance professionals and retirement planners tout the pay yourself first method as an effective way to ensure you contribute to savings month after month regular savings contributions can go a long way toward building a long term nest egg if you are using the pay yourself first method of personal finance you may opt to put your money in a range of savings vehicles depending on your financial objectives the phrase can refer to earmarking a certain percentage of your paycheck to be contributed to your retirement accounts such as a 401 k or an individual retirement account ira alternatively you may put the funds in a cash savings account paying yourself first simply involves building up a retirement account creating an emergency fund or saving for other long term goals such as buying a home if you can manage it paying yourself first will likely reduce your stress as you ll have something saved for retirement and a way to pay for emergencies in cash from your car breaking down to unexpected medical expenses 