Paying Yourself First

Paying Yourself First

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Do you pay yourself first?  Or do you pay yourself the ‘scraps’ left over once everyone else has been paid?

You have probably heard of the “Pay yourself first” concept, but the key question is, do you apply it?

As an entrepreneur, I know full well how it feels to pay everyone else first and then have nothing left for myself at the end of the month.  I did it for a few years on my own entrepreneurial journey.  After awhile it doesn’t matter how much you love your work or your business, if you are not paying yourself a good salary and paying yourself first you will be left feeling resentful and unhappy.  Neither of these emotions are productive for a thriving business.   Ask yourself…

  1. Who cares the most about this business?
  2. Who works the hardest in this business?
  3. Who is the most passionate about this business?
  4. Who has taken the risk on this business?

The answer, of course, is YOU and that is why YOU need to be paid first.  Without you – your passion, hard work and talent – the business wouldn’t exist. Thus you need to be rewarded first.

The moment you prioritise yourself in your business, is the moment that you will begin creating wealth for yourself through your business.

The question most entrepreneurs (who don’t pay themselves first) ask is “but what if I can’t pay my bills at the end of the month?”

The answer:  You are an entrepreneur and you’ll make a plan.

Some of your creditors may need to wait a week or two, but you will make a plan. I have experienced with the “Pay yourself first” phenomenon, once I started paying myself first the amount of money coming into my business increased to allow me to easily pay all my bills at the end of each month. I have observed this phenomenon it with many people who have done my Money Magic program too.  I can’t explain why, but prioritizing yourself attracts more money.I prioritise my payments in this order

  1. Pay myself first
  2. Pay taxes second
  3. Pay my lifestyle third (budgeted and within my means)
  4. Pay my business expenses last (and pay them in order of priority most important service provider to least important service provider)

You started your business with the goal of making money and creating wealth for yourself.  It is time to do so.  No-one else has the job or purpose of making you rich and wealthy.  That’s up to you.  If you don’t put yourself first, no one else will.

Upcoming Courses

Money Magic Seminars in October

In October, Donna McCallum  (aka The Fairy Godmother) is doing her 3 hourMoney Magic Seminars around the country to empower YOU create real wealth.

During the session you will learn about your relationship with Money, why you have the current Money Habits you do and how to change them into empowering habits to create real wealth.

Cape Town – Tuesday 11 October 18h45 – 22h00

Johannesburg – Thursday 13 October 18h45 – 22h00

Durban –  Saturday 15 October 10h15 – 13h30

Price: R200

To book your place go to: www.fairygodmotherin.com or call 084-207-0202 or email info@fairygodmotherinc.com

Donna McCallum
Donna McCallum is also known as the Fairy Godmother. She has helped thousands of people in South Africa, the UK and the US focus on their dreams and goals. She is the author of The Fairy Godmother’s Guide to Getting What you Want and runs empowering 12 Week Money Magic Online Programme to help people transform their relationship to money. Prior to being a Fairy Godmother, Donna was a successful entrepreneur having started, built and sold businesses in media and marketing. For more info on Donna and the Money Magic courses, visit the Fairy Godmother website.
  • Sorry but I really do feel that the first obligation that you have as a business owner is to pay your staff first. You have made a contract with them and being out of integrity with them will do more damage than not paying yourself a full salary ever will.

  • Thankfully I don’t have ay employees. we should all be independent contractors!

    • Yes, it’s a responsibility. I think Donna is aiming at the entrepreneur who is ‘owned by’ their business rather than being a ‘business owner’. It seems to be a case of striking a balance between being a slave to one’s business (where everyone else’s needs come first) and not being responsible for others…
      I sorry that I won’t be able to attend this particular session because Donna’s reputation is awsome! She also runs what looks like a really cool online course so that anyone from anywhere around the country can still get the benefit of her wisdom (and fun attitude) about money – even if they are not in one of the main centres where she holds these introductory sessions.

  • dyambu1

    It now makes more sense to me. I will adopt the concept with immediate effect (although I may need an overdraft to pay my staff second. They are just less important than me but hey they are as well). Thanks for the eye opener!

  • Pay yourself first is a great financial model to adopt, but many of those people who talk about this model seems to miss the obvious thing that makes it workable: decrease spending, increase profit and THEN take the increase in profits out of the business as a “pay yourself first” transaction. I once heard an expression that said that you first need to create space in order for success to happen. Well, in this case you need to create the profit space first, before you can pay yourself first (or pay yourself more). It’s pure common sense. There is no need to leave any creditors, employees etc waiting for weeks. Just change the situation so that everyone recieves their fair share of the money pie. When it comes to taxes: you can still pay taxes first and take your cut after that. If you can´t take your cut after taxes, then you need (once again) decrease your supplier spending or let some employees leave their job, BEFORE you pay yourself first. It seems like you somehow go on hope. “I pay myself first and somehow I will afford to pay creditors later”. That doesn´t sound like a rational plan, my plan is. You can´t act on hope, but you can act on pragmatic plans. People who have a well thought-out plan have no need for hopefulness.