Pay Yourself First (PYF) is best described as...

• A. Automatically route your specified savings contribution from each paycheck at the time it is received.
• B. A method to borrow money at a low rate
• C. Choosing how to spend first
• D. A retirement account.

Answer: (A)

Pay Yourself First means treating savings as a priority by automating transfers from each paycheck into savings or investments as soon as income arrives. The best description is to automatically route your specified savings contribution from every paycheck at the time you’re paid. By setting up a fixed amount or percentage to be saved and directing it to a savings or investment account automatically, saving becomes a built-in step rather than an afterthought. This habit helps you build an emergency fund and reach long-term goals because saving happens before you have a chance to spend on other things, reducing reliance on willpower. It isn’t about borrowing money at a low rate or about deciding how to spend first; and while a retirement account can be a destination for PYF, the defining idea is the automatic, pre-spend saving action.