“Pay yourself first” is a behavioral finance principle that flips the typical budgeting order: instead of saving what remains after spending, you make saving the first transaction when income arrives. This practice was popularized in personal-finance literature because people tend to spend what’s available; by automating savings you make it a non-negotiable bill. The psychological effect is powerful — treating savings as mandatory reduces the temptation to spend and increases the consistency of contributions, which compounds into meaningful progress over time. Variations include payroll deductions to retirement accounts, automatic transfers to a high-yield savings account, or recurring investments into brokerage accounts or target-date funds. For debt repayment, “pay yourself first” can be adapted so that extra principal payments are automated.

Practically, implementing pay-yourself-first means setting up automatic flows that happen immediately after income posts. Options include splitting direct deposit into multiple accounts, scheduling automatic transfers the day after payday, or increasing employer retirement deferral percentages. Decide allocations ahead of time (for example, X% to retirement, Y% to emergency, Z% to a sinking fund) and commit to those percentages as baseline “bills.” Monitor periodically and increase allocations when income rises. Be mindful of liquidity needs — keep a starter emergency fund so that automation doesn’t cause short-term cash crunches. The combination of automation, clear destinations, and incremental increases makes pay-yourself-first the single most reliable behavioral leaver for steady net worth growth.