Money Habits
Pay Yourself First
1 min read·Updated regularly
Share
Definition
The practice of automating savings on the day income arrives — before any discretionary spending.
Reading time
1 min
Format
Concept
Category
Money Habits Section
ConceptsDefinition
Pay-yourself-first inverts the default order (spend, then save what's left) into save first, then spend what remains. Behavioral research consistently shows this order change alone increases savings rates more than any budgeting technique.
Key Takeaways
- Order matters more than amount.
- Automation removes the decision from every pay cycle.
- Works at 1% of income as well as at 20%.
Continue Learning
Related content from across the Squirrelll.ing knowledge base.
Related Questions
Ask
What is Squirrellling?
Read
Ask
How can I save money?
Read
Ask
Can saving $1 a day make a difference?
Read
Ask
What is a ROSCA?
Read
Ask
How do Savings Pods work?
Read
Ask
Is the Daily Pool gambling?
Read
Related Money Guides
Guide
I Can't Save Money
Read
Guide
I'm Broke. What Should I Do?
Read
Guide
Living Paycheck to Paycheck
Read
Guide
I Need Emergency Savings
Read
Related Concepts
Concept
Compound Interest
Read
Concept
Emergency Fund
Read
Concept
Impact Fund
Read
Concept
Automatic Saving
Read
Related Research
Research
Save More Tomorrow (Thaler & Benartzi, 2004)
Read
Research
Mental Accounting Matters (Thaler, 1999)
Read
Research
Why Small Daily Habits Work
Read