Why “Pay Yourself First” Is Still the Best Money Advice for 2025

 

Introduction: The Oldest Financial Rule Still Wins

"Pay yourself first."

You’ve probably heard it. Maybe even brushed it off.

But in a world of TikTok finance hacks and crypto memes, this one classic rule remains king — and it’s more relevant than ever in 2025.

Today, let’s understand what "paying yourself first" really means, why it works so effectively, and how Malaysians can apply it to build lasting wealth.

What Does It Mean to Pay Yourself First?

It means prioritizing your savings and investments before you spend on anything else.

When you receive your salary, the first action is saving a portion, investing a portion, and then living on the rest.

✅ Not the leftovers.
✅ Not "after all expenses are paid."
✅ Right at the start.

Example:
If you earn RM4,000 a month, immediately allocate:

• RM600 to savings/investments (15%)

• RM3,400 for bills, rent, groceries, lifestyle

No matter what happens that month, you have secured your financial future first.

Why It Works: The Psychological Power

• Automates Discipline
  You never "feel" the missing amount because you never had a chance to spend it.

• Builds Habitual Wealth
  Just like brushing your teeth, saving becomes automatic over time.

• Prevents Lifestyle Inflation
  You adapt your spending to what’s available after savings, not the other way around.

How Malaysians Can Apply Pay Yourself First

✅ 1. Automate Transfers
Set up auto-debits to savings/investment accounts (e.g., ASB, StashAway, Tabung Haji) right after salary day.

✅ 2. Start Small, Grow Big
If 20% feels overwhelming, start at 5% or 10%, then increase gradually.

✅ 3. Separate Accounts
Maintain separate "Spending" and "Saving" accounts to avoid temptation.

✅ 4. Prioritize Retirement Accounts
Max out EPF voluntary contributions or invest into PRS for additional tax relief.

✅ 5. Budget Backwards
Base your lifestyle budget after deducting savings — not before.

Malaysian-Specific Example

If you consistently save RM500/month into an account earning 5% returns:

Year	Total Savings (RM)
5	34,000
10	78,000
20	205,000

Small amounts, saved consistently, turn into big freedom over time.

Bonus Tip: Pay Yourself First Even with Side Income

If you’re freelancing, earning Shopee sales, or cash bonuses — apply the same rule:

• 20% to investments

• 10% to emergency savings

• Spend the rest guilt-free

This ensures every income stream grows your wealth, not just your expenses.

Conclusion: Secure Yourself First

The simple act of paying yourself first is a game-changer.

It’s not sexy. It’s not "viral." But it works — always.

In Malaysia’s ever-evolving financial landscape, the one who saves and invests consistently will always have the upper hand, regardless of salary size.

So next time your salary hits — remember: your future self comes first.

Welcoming the Lunar New Year: Financial Wisdom for a Prosperous Year Ahead

The Lunar New Year is just around the corner, and as families prepare to usher in another year of health, happiness, and prosperity, it's also the perfect time to reflect on financial habits and goals. After all, Chinese New Year isn't just about firecrackers and feasts — it carries a deep-rooted significance of starting afresh and paving the way for abundance. This year, why not extend that philosophy to your financial life?

In this post, we’ll explore how you can apply the wisdom of Chinese New Year traditions and teachings to set yourself up for financial prosperity, all while enjoying the festive season without overspending.

1. Embrace the Financial "Spring Cleaning"

Chinese New Year is synonymous with spring cleaning — clearing out the old to make way for the new. In the same vein, you can give your finances a fresh start by evaluating your current financial situation.

• Declutter Your Finances: Take stock of outstanding debts, subscriptions you don’t use, and other unnecessary expenses.
• Set Clear Goals: Whether it’s paying off credit card debt, saving for a family trip, or investing in a retirement fund, this is the perfect time to establish clear financial targets.
• Track Your Spending: Use budgeting tools or apps to gain better insight into where your money is going each month.

Just as a clean house is thought to welcome good luck, a “cleaned-up” financial plan sets the foundation for greater prosperity.

2. Celebrate Smart: Budgeting for Festivities

Chinese New Year celebrations can be expensive, from new outfits to feasts and ang pao (red packets). While it’s tempting to go all out, financial wisdom tells us to celebrate within our means.

Here are a few tips:

• Set an Ang Pao Budget: Giving red packets to children and unmarried relatives is a joyful tradition, but it’s easy to overspend. Allocate a specific amount for each recipient and stick to it.
• DIY Decorations: Instead of buying pricey decorations, consider crafting your own. Simple lanterns, paper-cut designs, or even reusing last year’s decor can save money while keeping the festive spirit alive.
• Plan Meals Thoughtfully: Hosting reunion dinners is a highlight of Chinese New Year, but it doesn’t have to break the bank. Opt for potluck-style gatherings or incorporate more affordable dishes without compromising on flavor or symbolism.

3. Lessons from Chinese Proverbs

Chinese culture is rich with proverbs that impart timeless wisdom, many of which are relevant to managing finances. Here are a few favorites:

• “滴水成河” (Drips of water make a river)
  This reminds us that even small savings can add up over time. Start small with savings or investments — whether it’s RM100 a month or a small percentage of your salary. Consistency is the key.

• “富不过三代” (Wealth does not pass three generations)
  This serves as a cautionary tale about spending recklessly and failing to instill good financial habits in future generations. Take this to heart by teaching your children the importance of saving and financial literacy.

• “未雨绸缪” (Repair the roof before it rains)
  This proverb emphasizes the importance of preparation. Having an emergency fund is essential, particularly during uncertain times. Aim for at least 3-6 months’ worth of expenses in savings to weather unexpected challenges.

4. Planning for Prosperity: Financial Goals for the New Year

Chinese New Year is a time for setting intentions, so why not set financial resolutions too? Here are some actionable goals to consider:

• Build or Expand Your Emergency Fund: Start the year by boosting your financial safety net.
• Invest Wisely: Research low-cost index funds, unit trusts, or platforms like StashAway to grow your wealth.
• Explore Dividend Investing: If retirement is on your mind, dividend-paying stocks or REITs can provide a steady income stream.
• Review Your Insurance: Ensure you and your family have adequate coverage for health, life, and critical illness.
• Automate Your Savings: Set up automatic transfers to your savings or investment account so that saving becomes effortless.

5. A Wish for Abundance and Prosperity

As we step into the new year, let’s embrace the values of gratitude, generosity, and wisdom that Chinese New Year teaches us. While we strive to grow our financial wealth, let’s also remember that true prosperity is about balance — investing in our health, relationships, and personal growth.

May this Lunar New Year bring you joy, health, and financial abundance. Gong Xi Fa Cai!