How can one financial habit change the savings game for millennials?

One of the most common pieces of financial advice millennials hear is, in theory, also one of the simplest: pay yourself first.

Yet, how many of us are actually following it?

The truth is, many millennials are struggling just to meet their needs, let alone have money leftover to save. We’re stuck working low-paying service jobs or unpaid internships, which don’t help us make any kind of significant dent in our student loan payments. The cost of food has skyrocketed in recent years, eating up large chunks of our sad-looking paycheques. On top of this, we’re making car payments (and paying for those pesky repairs), and we’re left crossing our fingers in the hopes there will be enough money in the account when the landlord cashes the rent cheque.

How can we ever start practice good savings habits, when we don’t have anything left to save?

I asked myself this question many times while working multiple jobs after post-secondary graduation. The excuses came easy back then – I told myself I would start making retirement contributions in six months, and start building up my emergency account next paycheque. And before I knew it, a full year passed by, and I still hadn’t made the change.

Then one day, not all that long ago, I realized I wasn’t truly taking the advice I was hearing. My problem was always the same: I never had the money leftover at the end of the month. And that’s exactly where I went wrong: I waited until I had paid for everything else – rent, loan payments, groceries, maybe even a few dinners out – and then found month after month, there was nothing left to add to my savings.

So I started making a change. Here’s how I went from barely paying all of the bills to increasing my savings goals month after month:

I set up automatic transfers.

Each month, a portion of money from my chequing account automatically transfers to my savings account. In the beginning, I scheduled it to happen early on in the month – trying to time it right around when my paycheque would come in. This, ladies and gentleman, is what paying yourself first is all about.

The transfer amounts were small at first – and I mean small. But at least it was something. It felt good just knowing I was actually saving. And to be honest, most of the time I didn’t even notice it was gone.

I built a monthly budget.

Now, I am a lot more attentive to my savings routine. I track both my spending and my husband’s, and record it in a monthly budget. (If you’re looking to start fresh with a budgeting routine, I highly recommend the Mindful Budgeting formula Cait Flanders designed over at Blonde on a Budget).

As mentioned above, my savings contributions are all automated (and this was even scarier when I became self-employed and had to learn how to adapt to the inconsistent income). But when funds are tight, my priorities are even tighter. It’s a lot easier for me to skip a meal out at a restaurant if it’s what I have to do in order to hit my savings goals that month. And I know it’s what I have to do, because the numbers are recorded right there in front of me.

I set specific goals.

Before long, I started to realize the power of visualizing what I would do with those savings. First, it was about making my final payment on my student loans and officially becoming “debt free.” Then it was about saving for a car, a house and a trip to the Caribbean.

Maria Timonina, fellow millennial and L.A.-based freelance writer, agrees it’s important to have a strong reason why you want to start paying yourself first. She suggests starting with more immediate goals (as saving for something like retirement can seem a little far-fetched at first). “When I set aside savings towards a much longer-term goal, it was hard to remember why I even wanted the bigger purchase when I could get, say, a super cute pair of heels instead, right now, today,” she says. “Especially if I’ve somehow convinced myself that I can’t live without them… because of course they go with most of the outfits I already own. And they are on sale.”

You get the picture. Savings goals are a lot more attainable when they’re within arm’s reach. So start there. And do what you have to do to remember it. “Write it down and keep it with your other frequently accessed financial documents,” Maria suggests.

I looked at it like a business transaction.

In a lot of ways, I have my new habit of paying myself first to thank for allowing me to make the leap to self-employment. It was important for my husband and I to build up an emergency savings cushion of $10,000 before I said goodbye to my full-time salary.

And our automatic savings contributions definitely took a hit in those initial months. But now we’re back on track, and I’m starting to find new uses for this clever savings habit of mine, as it relates to my business needs. I’ve been fortunate to also have the advice of fellow solopreneurs within my network who have a bit more experience in business finances than I do.

Amanda Abella is an online business coach, speaker, and author of the Amazon bestselling book Make Money Your Honey: A Spiritied Entrepreneur’s Guide to Having a Love Affair with Work and Money. She shares some perspective on how the habit of paying yourself first relates to business.

“I used to think it meant sock away as much as I can and try and run my business on as little money as possible,” she says. This rational came from her previous financial routine, when she worked at a “regular job” and saved as much as she needed in order to quit. “The problem was when it came time to make an investment in my business, I would have to dip into personal savings because I’d left virtually nothing in the business account. That, of course, defeated the purpose of paying myself first because whatever I’d pay myself would go back into the business.”

She learned to treat her self-employed savings habits like a salary, which once again, she sets up to be paid automatically. And while her advice applies to business, it also makes sense from a personal standpoint. If you really want to make your money work for you, instead of finding a way to work for your money, you need to be in control of your “salary” at the end of the day. And the best way to take control is to first take what is yours – after all, you’ve earned it. It may not be a lot at first, but it opens your mind to a new way of managing your money.

And I’m telling you, you’ll never want to return to your old money spending habits again.

Do you pay yourself first? How did you make the transition? Share your experience in the comments below.