What does the phrase "pay yourself first" mean?

The phrase "pay yourself first" emphasizes the importance of prioritizing savings or investments before addressing other discretionary spending. This approach encourages individuals to set aside a portion of their income for savings or investments as soon as they receive it, effectively treating these contributions as an essential expense. By doing so, individuals can build wealth over time and ensure that they are making progress toward their financial goals, such as retirement savings or emergency funds.

This principle also suggests a proactive stance in managing finances, where one's future financial well-being is prioritized over immediate desires or expenses. It is an effective strategy for cultivating a habit of saving and can lead to more substantial financial security in the long run.