Budgeting: Pay Yourself First - Yolo Federal Credit Union Skip to main content

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Picture this scenario. You spend weeks looking forward to your next payday, but when it arrives the money seems to fly out faster than it went in. Once the deposit is made, your hard-earned money is sent off to pay for living expenses, bills, and other necessary items like groceries—and your savings account gets what little is left over.

Sound familiar? If this is you, ask yourself, “what would happen if you flipped that scenario on its head?” Rather than focusing on paying everyone else first, reprioritize your paycheck and pay yourself first.

Most budgets focus on expenses. However, the pay yourself first method (aka reverse budget) prioritizes savings goals before expenses. In this blog, we’ll cover five ways to master this budgeting method:

   1. Review your spending.

This might be the hardest and most critical step. Not having a solid understanding of where your money goes each month will make it harder to pay yourself first each month. To get a clear picture, use a spreadsheet or budgeting app to review your spending for the last few months and focus on:

  • Are there areas where you’re overspending?
  • What changes can be made and still meet financial obligations?
  • Can your savings cover unexpected emergencies?

This process will help ensure a thorough review and give you a reference point for step 5.

   2. Identify your financial goals.

To set yourself up for success, take time to define and prioritize your short- and long-term financial goals. For example, building an emergency fund and saving for retirement should have a higher priority than other goals like traveling or a down payment on a home.

   3. Determine how much to pay yourself.

For this step, make sure you’re realistic. The 50-30-20 method is a great tool to help determine how much to allocate towards needs, wants, and financial goals. Once you’ve picked a top financial goal, commit 20% of your monthly income.

   4. Automate your savings.

The easiest way to stick to your savings goal is to set it and forget it. You can do this by setting up automatic deductions with your employer for retirement savings or monthly recurring transfers into a savings account. Or our Shortcut to Savings program will help you save the difference with every debit card purchase.

   5. Review and adjust.

Making financial changes takes time and commitment. To ensure success, monitor your progress and modify as needed until you hit a groove. For example, if you’re coming up short with covering your monthly expenses repeat step 1 and find areas where you can adjust.

Pay yourself first is a great way to commit to savings goals, but before committing, weigh out the pros and cons. Here are a few considerations:


  • Low maintenance and easy to start
  • Guaranteed you’ll achieve your monthly savings goal
  • Likely to reduce impulse spending
  • Helps build good savings habits


  • May not work for larger debt payoff goals
  • Could feel financially stretched in the beginning
  • Can be challenging to prioritize saving over other goals

Budgeting isn’t one-size-fits-all, and a reverse budget may not work for everyone. Before deciding which budget method best fits your needs, explore multiple options, including Zero-Based Budgeting. If you’re working on paying down debt, check out our Game of Debt-Free Life as a fun way to visually track your payments.

For another convenient way of monitoring your money, check out our Money Track tool, available through Online Banking. The Money Track tool allows you to link all of your external accounts to one location so you can track your spending habits, create and achieve goals, budget across multiple accounts, and more! Click here to learn more.

As Yolo County’s #1 Best Credit Union, we’re here to help you with the tools and resources to grow your future. To learn more about budgeting or to pay off debt check out these Achieve playlists: Budgeting for Life and Climbing out of Debt.

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