ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -"Pay yourself first” is a personal finance strategy of increased and consistent savings and investment while also promoting frugality. The goal is to make sure that enough income is first saved or invested before monthly expenses or discretionary purchases are made.

Detailed explanation-2: -When you pay yourself first, you pay yourself (usually via automatic savings) before you do any other spending. In other words, you are prioritizing your long-term financial well-being.

Detailed explanation-3: -Saving is the portion of income not spent on current expenditures. In other words, it is the money set aside for future use and not spent immediately.

Detailed explanation-4: -With a pay-yourself-first savings strategy, your savings always comes first. This means dipping into savings is almost entirely off-limits. By following this strategy, you would rather pay a bill a month late than take money from your savings to pay it off. This is also why the strategy works.

Detailed explanation-5: -List and prioritize your financial goals. Take care of the financial basics. Connect each financial goal to a deeper motivation. Make a financial plan to reach your financial goals. Revisit your financial goals regularly.