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Pay Yourself First

Updated: Aug 14, 2022

When I began tracking my spending, I realized every month I gave my money to the bank, to malls, car dealerships, restaurants, hair salons, and nail salons but never to myself. This means I thought places like Target, Chipotle, Fashion Nova, and Starbucks needed my money more than I did. I needed to make it a goal that every time I got paid, I would pay myself first.

I had to make this a goal, act and be smart about it. I took the following three steps:

Step 1: Establish short-term and long-term goals

Short-term goals can be accomplished in less than a year or 12 months. A long-term goal takes more than a year or 12 months to accomplish. An example of a short-term goal would pay off a credit card balance. An example of a long-term goal would be buying a house. It is good to establish both types of goals so that you can celebrate little wins on your way toward celebrating the big wins.

Step 2: Write all the goals down

Simply thinking about a goal or telling someone is not enough. The goals are not real until you can see and read them. When I negotiate deals, I know it is not final until I see them in black & white, which entails having the deal written out in black ink on a white sheet of paper. Even if it is just regarding grass cutting, I need to see it in writing. I hold myself to that same standard.

Step 3: Make it a SMART goal

As a student, I was taught to use the acronym SMART when setting goals. I determined what I was willing to start and made a commitment to get it done despite any obstacles then I wrote it down and made it a SMART.

S.M.A.R.T. stands for:

Specific (simple, sensible, significant).

Measurable (meaningful, motivating).

Achievable (agreed, attainable).

Realistic (reasonable, realistic, results-based).

Timely (time-based, time-limited, timely, time-sensitive).

How to Use SMART


A specific goal should address questions such as:

  • What do I want to accomplish?

  • Why is this goal important?

  • Who is involved?

  • Where is it located?

  • Which resources or limits are involved?

Specific Example

I want to pay off my $12,000 in credit card balances to invest more money into my retirement savings so that I can become financially free.


A measurable goal should address questions such as:

  • How much?

  • How many?

  • How will I know when it is accomplished?

Measurable Example

I will pay $500 per month towards my credit card balances and pay the balance off in full in 24 months or two years.


An achievable goal will usually answer questions such as:

  • How can I accomplish this goal?

  • How realistic is the goal, based on other constraints, such as financial factors?

Achievable Example

By reducing monthly expenses by $250 (stop spending money on things I didn’t need) and earning an extra $250 in income I will be able to afford $500 towards my credit card balances each month.


A relevant goal can answer "yes" to these questions:

  • Does this seem worthwhile?

  • Is this the right time?

  • Does this match our other efforts/needs?

  • Am I the right person to reach this goal?

  • Is it applicable in the current socio-economic environment?

Relevant Example

First, I would have to stop accumulating debt so that my balances would remain below $12,000, which meant I had to stop using my credit cards. Second, by utilizing various apps that tracked my spending I was able to see where my money was going. Third, I only worked during the week, so my weekends were open for a part-time job delivering food, babysitting, selling handmade jewelry, or braiding hair to earn additional income.


A time-bound goal will usually answer these questions:

  • When?

  • What can I do six months from now?

  • What can I do six weeks from now?

  • What can I do today?

Timely Example

I will begin working towards my goal today and have made credit balances pay off in two years.

Establishing a smart goal is an excellent start, but it’s not enough to achieve that goal. To achieve a goal a system must be put in place. Writing down a goal in your journal and setting it on your nightstand lacks accountability. As I have stated before knowledge without application is powerless. I needed to pay off my credit card debt and never build that debt back up.

An Example of a NOT-so S.M.A.R.T. Goal:

“I’m going to pay off all my credit cards this year.”

An Example of a SMART Goal:

"I'm going to pay off my $12,000 in credit card balances by paying $500 per month by reducing my monthly expenses by $250 and earning $250 more income every month. In two years, the debt will be paid off in full and then I will invest that $500 into my retirement savings.”

Want to learn more about SMART goals and other terms every investor uses? Download your free wealth-building cheat sheet.

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