Building wealth does not start with stock tips, crypto trends, or complicated investment strategies. It begins with one simple habit that changes the way you treat money: Pay Yourself First.
Most people follow this pattern:
Income → Expenses → Savings (if anything is left)
We flip it to:
Income → Savings → Expenses
This one shift can transform your financial future.
As part of Financial Habits Month on Money Markets with SK, today’s focus is on the most powerful habit you can build — saving for yourself before you pay anyone else.
What Does “Pay Yourself First” Really Mean?
“Pay Yourself First” means setting aside a fixed portion of your income the moment it arrives — before you spend on rent, EMI, groceries, or lifestyle expenses.
It is not about saving “whatever is left” at the end of the month.
It is about making saving your first priority, not your last option.
Think of it as a future expense:
- Rent is for today
- Groceries are for today
- Electricity bill is for today
- Savings are for your future
Your future deserves to be paid too.
Why Most People Fail to Save
Many salaried professionals and business owners say:
- “I don’t earn enough to save.”
- “I’ll start saving once my income increases.”
- “This month had too many expenses.”
But the truth is:
If you wait to save what is left, there will always be nothing left.
Lifestyle automatically expands with income.
More salary often leads to:
- Bigger house
- Better car
- More gadgets
- More subscriptions
- Higher EMI commitments
Without a system, saving always stays “tomorrow’s plan”.
That’s why Pay Yourself First works — it removes willpower from the equation.
The 20% Rule – A Simple Framework
A practical benchmark is to save at least 20% of your income.
If your monthly income is:
- ₹30,000 → Save ₹6,000
- ₹50,000 → Save ₹10,000
- ₹1,00,000 → Save ₹20,000
This 20% can go into:
- Emergency fund
- SIP in mutual funds
- PPF / NPS
- Goal-based investments (child education, retirement, house, etc.)
If 20% feels difficult today, start with:
- 5% or
- Even ₹500 per month
The amount is less important than the habit.
Small amounts build discipline.
Discipline builds wealth.
Automation: The Secret Weapon
The real power of this habit comes from automation.
When savings happen automatically:
- You don’t forget
- You don’t postpone
- You don’t negotiate with yourself
- You don’t feel the pain of spending less
Your system works even when your motivation is low.
Set up:
- An automatic bank transfer on salary day
- SIPs scheduled on the same date as salary credit
So the flow becomes:
Salary credited → Savings deducted → Balance available for spending
You learn to live comfortably with what remains.
This is how wealthy people think.
They don’t save after spending.
They spend after saving.
Psychological Shift: From “Leftover Saver” to “Wealth Builder”
Paying yourself first creates a powerful mental change:
- You stop feeling guilty about spending
- You gain clarity on what is actually affordable
- You become intentional with money
- You feel in control instead of reactive
Instead of thinking:
“Can I afford to save this month?”
You start thinking:
“Can I afford this expense after saving?”
That is the mindset of a wealth builder.
Real-Life Impact Over Time
Let’s see the long-term impact of this habit.
Assume:
- Monthly saving: ₹5,000
- Investment in SIP earning 12% annually
- Duration: 20 years
Result:
- Total invested: ₹12,00,000
- Final value: Approx. ₹49–50 lakh
Now imagine increasing that to ₹10,000 per month.
Same 20 years:
- Total invested: ₹24,00,000
- Final value: Approx. ₹1 crore
No lottery.
No inheritance.
Just consistency and compounding.
That is the power of paying yourself first.
Common Excuses & Practical Solutions
“My salary is too low”
Start with ₹500 or ₹1,000.
The habit matters more than the amount.
“I have too many EMIs”
EMIs are past decisions.
Savings are future protection.
Even 2–3% is better than zero.
“I forget every month”
Automate it.
Systems beat memory.
“I’ll start next month”
Every month you delay, compounding delays with you.
The best day was yesterday.
The next best day is today.
Where Should This 20% Go?
Divide your “pay yourself first” amount into buckets:
- Emergency Fund (First Priority)
Build 6 months of expenses in a liquid fund or savings account. - Goal-Based SIPs
- Child education
- House purchase
- Retirement
- Travel fund
- Long-Term Wealth Creation
- Equity mutual funds
- Index funds
- NPS
Once emergency fund is ready, most of the 20% can go into growth assets.
How to Start Today – Step-by-Step
- Check your monthly income.
- Decide your saving percentage (start with 5–20%).
- Fix a date — preferably your salary credit date.
- Set up:
- Auto bank transfer
- SIP mandate
- Treat that amount as non-negotiable.
- Adjust your lifestyle to the remaining balance.
That’s it.
No complex spreadsheets.
No financial jargon.
Just one powerful habit.
A Simple Rule to Remember
Saving is not what you do with leftover money.
Saving is what creates leftover money.
Or in simpler words:
Saving is an expense for your future self.
Just like rent keeps a roof over your head today,
Savings keep dignity over your head tomorrow.
Final Thought
You don’t need perfect income.
You don’t need expert knowledge.
You don’t need market timing.
You only need one habit:
Pay Yourself First.
Make it automatic.
Make it consistent.
Make it non-negotiable.
Your future self will thank you — quietly, every single day.
Actionable Tip for Today:
Set up an automatic transfer or SIP for at least 20% of your income on the day it is credited.
Start small if needed — even ₹500 is enough to build the habit.
If you haven’t started your SIP yet, today is the best day to begin. 🌱
This is Day 1 of Financial Habits Month at Money Markets with SK. Stay tuned for daily, practical money habits that actually work.
