Discovering the Pay Yourself First Principle
When I first came across the concept of “Pay Yourself First” in The Barefoot Investor by Scott Pape back in 2016, something clicked. At the time, I was saving for my first home deposit and had opened an online savings account with the best interest rate I could find. No frills, no fees, just purpose.That simple principle: paying myself before paying anyone else reshaped how I thought about money. As a sole trader, I’ve also had to be intentional about my superannuation contributions, ensuring my future self is looked after just as much as my present one. Paying myself first became more than a financial tactic. It became a mindset of putting my goals before my obligations.
Creating Purposeful Money Buckets
Over time, I built a system of “moneybuckets” across different online banks, each with a clear goal. All fee-free. Each bucket has a purpose. Some for investing, others for short-term goals, travel or emergency funds. Separating my money this way gives each dollar a job. It keeps my spending aligned with my values and ensures I never dip into funds meant for future growth.
Staying Consistent on the FIRE Journey
When I started exploring the FIRE (Financial Independence Retire Early) movement, I wasn’t sure where to begin. I knew that I should have my savings invested as that’s the key to building wealth. I liked Vanguard Personal Investor because it allowed fortnightly direct debits a “set and forget” approach. The minimum to start with was $200 a fortnight. At that time it was only their Index Funds that were available to auto invest too. Later, I added Pearler, which offered an auto-invest feature to Exchange Traded Funds (ETFs). I set a small weekly deduction, and at the end of each month, the total was invested automatically. Consistency became my secret weapon. Come rain or sunshine, contributions flowed. Whether markets were up or down. It removed emotion from investing and replaced it with quiet discipline.
What Pay Yourself First Looks Like in Practice
Here’s how I’ve structured my system to make sure I adhere to pay yourself first principle:
- Each fortnight: a direct debit contribution to Vanguard Personal Investor
- Each week: a set amount to my Pearler account, which auto-invests monthly into an ETF
- Each week: voluntary superannuation contributions to build future wealth
It’s simple, automated, and intentional. Every dollar that flows in is given a purpose before lifestyle spending begins.
Time Rich Reflection
Financial freedom isn’t built overnight. It’s built one automated transfer at a time. By paying myself first, I’ve learned that consistency matters more than timing the market or chasing the next big thing. Whether it’s rain or sunshine, money flows first into my investment accounts, superannuation, and savings goals. This is before lifestyle expenses have a chance to grow. This approach creates peace of mind. It turns wealth-building into a quiet habit rather than a struggle. Being Time Rich isn’t about deprivation. It’s about designing a system that prioritises your future self and aligns with your values today.
So, next payday, before you pay the bills, pause and ask yourself: Have I paid myself first?