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The ‘Future-You’ Mentality: Pay Yourself First

pay yourself first invest and save before spending

Today’s post is short, sweet, and important!


Getting to know future-you, and learning how to pay yourself first, is the best thing you can do for both of you. Investing, budgeting, eating healthy, making friends, taking classes, etc. all follow from being charitable and useful to future-you.


Virtually every investing site out there uses the saying, ‘pay yourself first.’ When you read this, you are reading a wonderful phrasing of an even more wonderful mentality. When you get your salary and set aside 15% of it in a long-term investment account, you aren’t losing money: you are making a payment to future-you. It’s very easy to feel like you are losing money when you literally lessen your income each month. And yes, in the short term you are ‘poorer,’ whatever that means to you. But you’ve made a payment to future-you, which means you are much richer, considering that the money you socked away will grow over time.


So, you’ve paid yourself first. You’ve taken care of future-you. Future-you is a friend of yours: someone you have committed to making healthy, wealthy, and wise. And come on, the results are more than inspiring: 


long term growth investment vs saving comparison


Investing is, of course, a great way to benefit future-you. But there are others. Eating well and getting some regular exercise is a great way to help out future-you. Cycling to the store or to work saves money and keeps you healthy. Investing in education or your human capital can potentially help future-you more than any monetary investment! Invest in time: researching schools, taking classes, finding jobs, choosing insurance policies, comparing vacation spots, used-cars, laptops, smartphones, whatever. It will save you money and make future-you satisfied and appreciative of your simple but important efforts.


So go through life with your new friend future-you. You’ll get along pretty well, and you’ll both end up healthier, wealthier, and happier. Thinking this way is already wiser.


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*This graph assumes an annual return of 8% on investments in a broadly diversified portfolio of index funds. The annual return on funds in a savings account is set at 0.06%, the U.S. national average. Returns are compounded annually and not adjusted for inflation.

4 thoughts on “The ‘Future-You’ Mentality: Pay Yourself First

    1. Thanks for commenting! That’s difficult to answer without knowing (too many) personal details about your citizenship status, income, etc. But the easy points to grasp are:
      1. Paying off any and all debt as quickly as possible, starting with your highest rates.
      2. Consistently saving x% of your income for the future.
      3. Making sure your savings are working for you by investing passively with Vanguard, Betterment, Wealthfront, etc.
      4. Having enough ‘cash’ (savings/checking) on hand to cover surprises life will throw at you.
      5. Living frugally- be happier with less and don’t depend on material things.

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