Why You Need to Pay Yourself First

Let’s talk about the elephant in the room—you.

You’re a business owner, and you want to grow your business. We get it. We’re entrepreneurs too! And we’ve learned some hard lessons about what not to do when growing your business. The same lessons that tend to break new businesses (and small businesses with growth ambitions) are often the ones that keep owners from getting what they really need out of their business: success, recognition for their work, and the ability to support themselves financially.

Pay yourself first.

We know what you’re thinking: “I’m already paying myself.” But think again—are you really paying yourself? If you don’t have a separate bank account for your personal finances and your business finances, you may be paying yourself in ways that hurt your business.

This is a problem because it makes it more difficult to tell how well your business is doing. It makes it harder to decide whether or not you should take out a loan or line of credit so that you can complete a large project or buy more inventory. It makes it harder to understand where you can cut costs so that you can save up for a vacation or buy something special for your family or just give yourself a little time away from the day-to-day hustle and bustle. 

You are the most important asset in your company.

An employee is someone who comes to work for you. But YOU are your own boss—you work for yourself. It’s hard to give yourself a raise or a bonus when things are going well, but it’s even harder when times are tough and you aren’t paying yourself a living wage or enough to get by on. You need to make sure that you can afford what it takes to keep your company running and yourself afloat if times get tight. When you’ve got a big project coming up at work, do you tell yourself “meh, I don’t have time”? No! You make time because it’s important and needs to get done. And the same should apply to paying yourself first—because even if everything else gets pushed to the back burner, you’ve got to keep on keeping on.

Paying yourself first is the secret to financial success. By paying yourself first, you ensure that you’ll always have the money to keep your business running—even if it feels like everything else is falling apart around you. If you aren’t paying yourself first, then every time something goes wrong (and let’s face it: things can always go wrong), you’ll be forced to choose between taking care of yourself and taking care of your business. But by paying yourself first, you give yourself some financial flexibility—and the ability to focus on what really matters: taking care of your clients, not just your bank account.  

When we think about it, there are three ways to pay yourself first: time, money, and energy.

Time

As a business owner, your time is the most valuable thing you have. It makes sense then, to take care of yourself so that your time isn’t spent dealing with sickness or exhaustion. Making sure you have enough sleep and healthy food will help keep you productive and happy.

Money

We all need money to live. But too often we don’t budget for ourselves before we get down to business expenses. And that means if we haven’t budgeted for savings or personal spending, then we might not be able to afford it when the time comes to pay ourselves with our own money!

Energy

When running your own business, taking care of yourself is critical. It helps you stay focused, alert, and motivated. When you make sure you have enough energy, it helps keep the flow of your work going smoothly as well as keep your stress levels down! 

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