If not first, when

Many people do not have a financial budget that they stick to, and even if they do have a budget and stick to it, many people do not have a space in their budget for savings. There are a couple main reasons for this. Some people feel they cannot afford savings. Their money is taken up by their bills and other essentials and they do not feel that savings is an essential part of a budget. Other people may not consider savings as something they should be adding money into regularly. Perhaps they feel that it is something they add to when they get extra money.

It is important for a person to pay themselves first because if they do not do it first they may never do it. After the money from a paycheck has gone to the bills and other monthly expenses, much of the leftover money will get used on things such as a morning coffee and muffin, or eating out at lunch, or buying a new CD. This money can be better used by being placed in a savings account. But if it is not put in the savings account first it will get used for other things.

You need a reserve

A person must pay themselves first in order for them to create a cash reserve. Everyone needs to have a cash reserve. No one knows what could happen to themselves, a family member, their job, etc. Especially with the recent ups and (mainly) downs of the economy, people better understand that financial items are uncertain. Having a cash reserve can help keep a person safe.

Money from a savings account can help a person pay for different living expenses, it can help them make their mortgage or car payments when times are tough, or they can help them to buy food and other essentials that they need to live.

Of course, having a cash reserve does not just have to be for when things are not looking great. A cash reserve can also be used for fun things as well. For example, a family may decide to take a vacation with some of the money they have saved up, or maybe they can buy a new car, or use the money for something they have always wanted. Having savings is a great thing to have in both good times and bad.

Do it

Many times if a person does not set up a budget with a "bill" to pay them self, or their savings, they will not do it. But if a person decides on a certain amount they would like to put into savings each month, and consciously does it then they will be more likely to get a cash reserve going and keep it going month after month.

There are many different excuses a person can come up with for why they can't afford to put money into their savings, but the biggest thing that a person should ask them self is can they really afford not to put money into savings each month? And the answer is that they can't afford not to. It is very important for a person to pay them self first so they ensure that the money gets to savings before it is spent.