I first read about the “Pay Yourself First” concept in the critically acclaimed book, Rich Dad Poor Dad: What The Rich Teach Their Kids About Money That the Poor and Middle Class Do Not! (referral link), when I was about 22 years old and trying to get myself out from under all of my student loan debt, and just be more fiscally fit in general. I picked that same book back up about three years later to re-read it and gain some inspiration.
That’s exactly what I got.
Three years later, I had accomplished my debt goals.
Three years after that(today): I am 31 years old and 100% debt free with a “healthy” net worth.
If you are already an experienced saver, skip down to the second half of this post to see how I believe you can apply your mastery of the Pay Yourself First principle to increase your side income.
Pay Yourself First
So what does the principle mean? It’s simply this:
Take your budget and put savings at the top of the order of operations.
Why? Because if you wait until you’ve taken care of everything else (even bills), you will undoubtedly find some excuse for why you can’t save money that month (or as much as you had planned). Many of you may have already experienced this.
Trust me, bills will get paid.
The water company will get paid.
Your mortgage company will get paid.
So? What about you? Are you playing second fiddle? If so, I want to encourage you: You’re in the driver’s seat. Your new phrase is: “I gots to get PAID.” And paid you shall be. Savings, move it to the top. This is the first thing I did on my path to debt freedom, and it. just. works.
Let Something Else Fall by the Wayside
Especially when you are in debt-payoff mode. Budget items such as discretionary spending, going out to eat, seeing that movie in theaters, whatever turns you on yet doesn’t sustain life.
Let that thing be the thing about which you say, “oh, well I can’t do that this month”, but for goodness sake, please don’t let it be your savings.
I keep referring to “savings”, but honestly it’s a placeholder. Use this concept for whatever budget category is your top priority. If it’s investing, invest first. If it’s paying down principal on your debts, pay principal first.
But put those priorities that will “move the needle” for your life, at the top of the order.
Moving on, I’d like to cover an area that currently hits close to home for me and hopefully for some of you who are wanting to increase your income to accomplish your goals faster: prioritizing your side gig.
Side Hustle First
I recently found a podcast by Chris Guillebeau called Side Hustle School, and I highly recommend it.
You may be hustling on the side for extra cash, or just because you enjoy a self-sustaining hobby.
If you are working on a side project for any reason, you have probably stumbled or fallen short with putting time into the project. Maybe you get home from a long day at work and just don’t have the energy.
Maybe you feel like you can’t muster enough energy to do anything except vegetate on the couch while watching re-runs of The Office.
Sound like anything you’ve read recently?
Is Your Side Hustle Playing Second Fiddle?
For me, personally, I am working towards eventually quitting my full-time job and being able to sustain a lifestyle that doesn’t require as much of my time being spent working.
I believe that the “quitting my job” part is just a milestone on my longer path to becoming financially independent where work is 100% optional. But for now, I am working the 9 to 5.
So I find it extremely ironic that the 9 to 5, which I desperately want out of, threatens to drain the energy out of me so that I can’t make progress on my side projects, which stand the chance of getting me out of my 9 to 5. What a scary, vicious cycle!
Trust me, your company will get its hours from you.
Your customers will get their time from you.
So I propose this: get up in the morning and put your best hours into your hustle so that you can truly make progress and edge closer to reaching your goals.
Speaking of your goals, what are they? I hope you will leave a comment and let me know how you are prioritizing them into your life.