Do you want to achieve financial success as a millennial? There’s two things you must do with your paycheck to get there

  • One, have savings goals
  • Two, pay yourself first

Having a savings goal is the one that comes easily to most people, but having an effective and tamper-proof budget that can help one to achieve the goals can be tough. The struggle of saving is real, especially if you’re a young person at the peak of life.

Well, the good news is, you can put your struggles behind you with the pay-yourself-first strategy, a.k.a the reverse budget strategy. If you can pay yourself first after every paycheck you receive, you’ll realize that achieving your financial goals is not really as tough as you might have imagined.


The first time I came across this “pay yourself first” method of budgeting, I quickly misinterpreted it to mean I have to spoil myself first on things that I don’t necessarily need. Like treating myself to a classy shopping spree or a vacation before taking care of expenses that I really do need.

That is not the case at all!

To pay yourself first means taking a proactive budgeting approach which suggests you put your money towards savings before any other expenses. The first two savings goals on your list should be your retirement and emergency savings. Any other savings goals comes after these two.

The reverse budgeting approach is one verified way you can spend less, save more, and reach your goals faster.


One thing you need to have in mind when building your pay-yourself-first budget is this: your spending plan depends on your savings goals, and not the other way round. According to financial experts, you have to meet your savings goal for the month first before you can spend the remaining of your monthly income on other expenses, needs and wants alike.

The 50/30/20 approach is a good way to determine how much you should pay yourself. With this approach, you’ll have to allocate 50% of your monthly income to your needs, 30% to your wants, and 20% goes to your savings. This approach pretty much summarizes how you can and how much you should pay yourself based on your monthly income.

Here is an example.

Frank is a 27-year-old sales rep whose monthly income is $2500. He practices reverse budgeting and here is a breakdown of how he spends his money.

Frank’s savings goals:

  • Retirement – $200
  • Emergency – $100
  • Vacation – $100
  • New car – $100

TOTAL – $500

Frank’s reverse budgeting:

  • Savings goals – $500
  • Immediate needs – $1250
  • Wants – $750

TOTAL – $2500

Every time Frank receives his paycheck, he first sets out $500 aside for his saving goals and then distributes whatever is remaining among his needs and wants like rents, groceries, bills, etc.


The short answer to that question is “yes and no”.

Yes Reverse budgeting is for anyone that wants to achieve financial prosperity in a shorter period of time compared to other methods of budgeting. As long as you have a steady source of income and a healthy dose of self-control, you can become a millionaire with time, breaking whatever boundaries that may surround you.

No Reverse budgeting strategy is not for you if you have problems with your finances. You have to meet a certain criteria before you can effectively try the pay-yourself-first budgeting strategy without risking your financial status.

If your source income is not substantial, you may need to augment it before implementing the reverse strategy. Also, a high-interest credit balance is one toxic debt you have to take care of before practicing reverse budgeting. I mean, you can’t be saving money for a new motorcycle when you have such debt.

Note that you can use a different reverse budgeting approach depending on your income, goals, and cost of living. You can do 40/30/30 for needs/wants/savings, or you can do 40/25/35. The key is to identify the right budget for you and work with it.

There you have you it! Comment below if you’ve tried the reverse budgeting strategy and how it worked out for you.