You have surely heard the phrase “pay yourself first”. But do you know how it works?
In his book Profit First, Mike Michalowicz introduces an innovative approach to managing company finances. The core idea is to flip the traditional profit model (“revenue − expenses = profit”) and put profit first (“revenue − profit = expenses”). This means that every time the company earns revenue, a fixed percentage is first set aside on a profit account, and the remaining money is then managed to cover the costs.
The system works by creating financial discipline and forcing companies to control their costs more strictly, dividing income between different accounts (profit, owner’s pay, taxes and expenses). That gives a much better overview of the financial situation and prevents unnecessary costs. This approach helps companies become more profitable by making sure that profit and the owner’s pay are always the priority.
But if you approach it from the other side and “pay yourself last”, spending money first on whatever seems necessary and saving what remains, you will often find there is nothing left to save! Because you spent it all without noticing.
Paying yourself last is a road to ruin, because it assumes endless willpower (to resist impulse purchases) and constant planning (weighing every potential purchase against the benefits of saving). People are not perfect at either.
If you can manage your money even a little, you probably knew this already…
What you may not have realised is that time works exactly the same way. If there is something you are passionate about, whether it is writing a novel, starting a business or spending more time with your children, the only way to make it happen is to start right now! No matter how many other tasks are pressing on you.
If you do not set aside your time now, even a little every week, there will never be a sudden moment in the future when you are on top of all your tasks and magically have more free time.
“Pay yourself first”: how do you pay in time?
Focusing on the important tasks that demand more time now (but would later give you more free time in return) tends to get buried under urgent firefighting. You know the little stuff that needs doing right now? When you have been rushing around all day, yet by the evening it feels like nothing got done? That firefighting is the time equivalent of paying yourself last. And it fails the same way: at any given moment those small time costs feel the most important, but they rarely serve the bigger goal.
Many of those small things do matter, but if you have neither the willpower nor a long-term way to choose between them wisely, so that enough time is left for the more important work, you can fall into a trap. How do you avoid it?
Write down the goals you definitely want to reach and the activities that are truly necessary to reach them. Break the big goal and its activities into smaller parts. And commit to those parts every day. Even alongside the “fires”!
This aligns with the timeless advice to spend the first hour of every workday on your most important projects, or to book meetings with yourself, marking those moments in your calendar so other obligations cannot overlap them.
Thinking of it as paying yourself first turns that advice into a life philosophy: if you use even a little time for what matters most to you, it is better to start immediately. It may not go smoothly at first, because it resists your usual busyness. The irony is that you will probably have to accept being less productive at first, as the other tasks start piling up. But then you will notice: when those tasks truly need doing, they get done. And if they do not get done? Perhaps they never actually needed doing at all.
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