What is the definition of "pay yourself first" in budgeting?

The phrase "pay yourself first" refers to a budgeting strategy that emphasizes the importance of prioritizing savings before any other expenses are considered. This means that as soon as income is received, a portion is allocated for savings or investments. The central idea is to treat savings as a non-negotiable expense, similar to how one would pay a bill, ensuring that you are consistently building your financial security over time.

By adopting this approach, individuals develop a habit of saving, which can lead to improved financial health and the ability to meet long-term goals, such as building an emergency fund or saving for retirement. The essence of this method is about taking control of your money, ensuring that savings are prioritized rather than being an afterthought once all other spending is done.