ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Introduction. Pay yourself first is a popular phrase in personal finance and retirement-planning literature. It is also an investor mentality that means automatically routing a specified savings contribution from each paycheck at the time it is received.

Detailed explanation-2: -Pay yourself first (PYF) means automatically setting aside money from each paycheck, as soon as you receive it, rather than waiting to see what, if anything, is left over to save at the end of the month.

Detailed explanation-3: -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-4: -Pay yourself first (PYF) means to redirect a portion of the income you receive to retirement savings, emergency savings, or some other type of savings as soon as you receive it, and before you pay any other bills. In other words, the first bill you pay each month should be to yourself.

Detailed explanation-5: -’Pay yourself first’ is a reverse budgeting strategy where you build your spending plan around savings goals, such as retirement, instead of focusing on fixed and variable expenses. This prioritizes savings, but not at the expense of necessary expenses like housing, utilities and insurance.