In the book, the Richest Man in Babylon, it says – “pay yourself first.”

It interest me why the author used the word “pay” instead of using the word “save.” I guess by using the word “pay,” there is an obligation attached to it.

Saving is a huge challenge especially these days. In our world of consumerism, immediate gratification is more popular than deferred gratification simply because the second one requires immediate sacrifice.

Some of you may ask; how can I save if I have nothing to save?

It’s sad when Filipino’s abroad have this mindset. Isn’t it the very reason you are working abroad or living abroad (like myself) is for us to have a better life? In my experience, if you are less than 3 to 4 years living abroad, paying yourself first can be a challenge because of many obligations. After 4 years, most of your obligations should already be settled and, you should be able to save. I understand the continuous need of helping others but who’s going to help you when you grow old?

No matter how rewarding immediate gratification is, everyone must be aware that people live longer nowadays. If you do not have enough resources when you reach your age of 70, enjoyment can stop at that age. Would you want that to happen to you?

To avoid this from happening, you need to sacrifice temporarily for deferred gratification.

There are two ways to do this. The first is paying yourself first financially. The second is investing time, talent and treasure to grow your spirituality.

To save all you can, I personally follow this simple rule – Love God, love your neighbor as yourself.

First, let’s talk about loving yourself.

Part of loving yourself is thinking about what future brings you. What do you want your future to be? Do you want to live a fulfilled life, a normal life, or a mediocre life?

People who live a fulfilled life are those who give a lot and share a lot to prosper their own life and lives of others. These people are the ones who end up living a longer life and a life of abundance. Why is this?

Shouldn’t one be losing more because you give more?

The scripture says the more you give the more you will receive. Luke 6:38 says, “Give and it will be given to you. They will pour into your lap a good measure – pressed down, shaken together, and running over. For by your standard of measure it will be measured to you in return.” I will talk more about this on my next blog.

Part of loving yourself is making sure that you are financially secured especially when you’re old and with no more sources of income. One way of making sure this happens, force yourself to pay yourself first.

When you pay yourself first, you multiply your power to do more in life. Let me show you the numbers.

In the scriptures, Joseph told the Pharaoh of Egypt to prepare for the seven years of famine by saving 20 percent (a fifth of the produce of the land – Genesis 41:34) of their harvest.

What this means is, force yourself to pay yourself 20% percent of your income before paying for anything. Anything means, paying your mortgage, paying your car, paying your credit card, and so on.

The conventional advice is to aim to save 10 percent. Why 10 percent? This is how much Abraham gave to Melchizedek, king of Salem, after blessing him for his victories (see Genesis 14:20c).

Let’s say you are 40 years old and you earn $1,000 each month. If you start saving 10 percent of your income each month, which is $100, by the time you reach 65, your total savings will be $30,000, assuming that you hid your money under your bed and no termite ate it.

What if you place your money is in a bank that gives you a hefty 3 percent interest compounding? The estimated growth of your savings becomes $45,000. It makes a huge difference by placing your money in the bank. But still, the end result of saving 10 percent is none too exciting.

Let’s use the same factors but this time we use the scriptural version of saving 20 percent. By the time you are 65 years old, your money in the bank will have an estimated growth of around $90,000. Saving 20 percent opens up opportunities to do more fun things. At 30 percent, it becomes really exciting.

It is not three times as hard to save 30 percent, as it is to save 10 percent. In some cases, it’s easier. Why? Saving 30 percent is more rewarding. If you are a person who loves to reward yourself, saving more is doing more. But if you want to have that cash flow without hurting your savings, 10 percent is enough. Let me show you how.

Again, using the same factors of saving 10 percent of your income but this time you invested your money earning a consistent 8 percent per year compounding interest. By the time you reach age 65, the total estimate of your money will be… roll the drums please… $95,000 (not bad). This is more than saving 20 percent.

Nowadays, an investment portfolio with an 8 or even 12 percent returns is plausible. However, you may have some sleepless nights because of the risk involved but it is doable.

Just a word of caution especially when seeking for high returns – do your due diligence. Invest based on your beliefs and ask for guidance from qualified professionals. Many scammers will be out there to offer you consistent profits through very attractive rates. If you are one of the many individuals who are trying to catch up your savings for your retirement, you can easily be tempted to do something that may result in regretting it for the rest of your life.

Remember, whatever you save today is for your future. Do not risk it.

Please note that the example I just gave you uses constant returns and it does not consider market fluctuations.

At this point, I would like to end the first part of my blog. I did not write about loving God and loving your neighbor yet because I want you to read the boring part first. The great stuff is saved for last and I want to keep it suspense until next week!

God is the greatest!