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Pay yourself first means just what it says. When you earn a dollar, the first person you pay is you. Most people do not do this. When most people earn a dollar, the first person they pay in Uncle Sam. They earn a dollar and before is even makes it onto their paycheck, they pay the government something like 27 cents in federal income withholding taxes. Then, depending on which state they live in, they may pay an average of 5 more cents in stat income tax. In the end, they wind up paying the government first as much as 35 or 40 cents of their hard earned dollar.
Bottom line. No exaggeration. NO hype If you want to be rich, all y9ou have to do is make a decision to do something that most people do not do. And this is to pay yourself first.
What most people do when they earn a dollar is pay everyone else first. They pay landlord, the credit card company, the telephone company, the government and on and on. The reason they think they need a budget it to help them figure out how much to pay everyone else so at the end of the month or the year or their working life, they will have something left over to pay themselves.
When you boil it done, there are basically six routes to wealth in this country. You can.
Pay yourself first.
If there was a legal way to avoid it, why on earth would you allow the government to have first crack at your paycheck. Remember, Uncle Sam’s cut totals roughly 30 cents of every dollar you make. That leaves you with just 70 cents to spend of everything else, including retirement savings and investing. Talk about tough. That is income shrinkage if I have ever seen it.
This is why so many people have trouble making ends meet. Say y9our salary is $50,000 a year. Since you are paying the government first, you are not really earning $ 50,000. What y9ou are actually earning is about 70 percent of $50,000 or $30,000. That is all the money you really have to pay your bills and try to build up a nest egg. Not very much, is it? No wonder so many people think they need to be on a budget.
