This is very powerful, but it’s often overlooked because it’s so simple. Most people save whatever is leftover each month but this never works. Rarely is there anything left to save after paying the bills. It’s human nature to spend whatever is in the bank, which is why you have to pay yourself before anyone else.

If you automatically save from each paycheck, you will be amazed that you still have enough left to pay your bills. We subconsciously adjust our spending to whatever is in the bank. Do you remember your last raise? At first you had a little extra money until you got used to it and then money was tight just like before the raise. The opposite is also true. If you start paying yourself first, you will feel a slight pinch in the beginning, but you will adjust your spending without even noticing it.

It works best if it’s automatically deducted from your paycheck. Begin with a small amount and have it deducted from your paycheck just like your taxes are withheld. If your employer can’t do this, have it automatically deducted from your checking account on payday.

Right now it’s not important how much is withdrawn. It can be as little as $25 every two weeks and it doesn’t matter where the money is deposited. You just need to automatically and consistently transfer the money into a separate account. Later you can worry about where to invest the money but for now you’re just creating a new habit.