Pay yourself first. Take time for your financial well-being checkup.

A business person walks confidently through an office hallway

As you reflect on your money habits and identify new financial goals, consider what you want your money to accomplish — and how to pay yourself first.

The beginning of a new year is often a time when we look at the progress we’ve made toward our goals and set or reset goals so we can continue to see improvement. Physical well-being tends to top the list of resolutions, but financial well-being is just as important.

As you’re considering your goals and developing new money habits, think about ways to pay yourself first. This is about prioritizing your long-term financial well-being. Here, we dive into four actions that can help you define this strategy in a way that works best for you.

1. Determine your “money jobs” — what you want your money to do

“Money jobs” are the things we want to accomplish with our money. They can be short-term, like buying a car or home, or long-term, like funding retirement.

In one episode of the Wells Fargo About Money podcast, Michael Liersch, Head of Advice & Planning at Wells Fargo Wealth & Investment Management, says, “When we align what we want to accomplish in life with our money, it can clarify whether money is truly working hard for us to get us to where we want to go. But that requires us to be intentional about what we want in our life [and] the jobs we want money to do for us.”

Once you assign a purpose to your money, you should have a better understanding of why you should pay yourself first. You might even consider naming different accounts after specific money jobs: New Car Fund, New Home Fund, etc. With a clearer purpose, you may better prioritize your spending and giving to help insure your overall investment plan is on track.

2. Keep down or pay off debt

A clear next step for how you pay yourself first is chipping away at any debt you may have. Over time, this should free up more funds to save or invest toward your money jobs.

There are two approaches to paying down or paying off debt: logically or emotionally.

Logically, it makes sense to apply the “avalanche method” by first tackling debts with the highest interest rates or heaviest tax implications, such as credit card debt or loans against a 401(k) plan. The amount you’ll stop spending on interest is extra money in your pocket.

Another logical approach is the “snowball method,” when you give yourself a quick win by paying off the smallest debt first and then adding that payment amount to the next debt in line to keep the momentum going.

Emotionally, you might consider starting with the debt that makes you the most uncomfortable, such as medical debt that reminds you of a past health crisis. Paying off emotionally negative debt may help ease your concerns and put you in a more optimistic mindset overall, establishing a better frame of mind to reach other financial goals.

Regardless of the strategy you choose, it can help to discuss debt prioritization with your financial advisor, who will be able to help you strategize.

3. Take small actions

Simple changes to your spending habits could make a big difference as you work toward your goals. For example, it can help to review all of your subscriptions (streaming services, magazines, the gym, etc.) and cancel the ones you don’t use or don’t really love. Paying attention to your habits when it comes to small purchases can be like giving yourself a bonus every month after you cancel.

This isn’t to say you should eliminate spending money on things you like; this is suggesting that you be mindful of where your money is going. If a purchase isn’t offering long-term benefits and you decide it’s not that important to you, perhaps the money should instead go toward one of the goals that you know is more important.

Your financial advisor can help you take an aggregate look at your savings accounts, spending, and investments. With that point of view, you might see some obvious places where additional savings can occur.

4. Invest for your future, even amid challenges

Unexpected financial events happen to everyone, whether it’s a change in your kids’ activities or education suddenly getting pricier or a parent having a big health-related expense they can’t handle.

At these times, remember the airplane rule: Put on your own mask before helping others. Try to stick to the investment plan you have established, and when things pop up, review the plan with your advisor to see how you might be able to make adjustments to help others without derailing your progress toward your goals.

Wells Fargo Wealth & Investment Management (WIM) is a division within Wells Fargo & Company. WIM provides financial products and services through various bank and brokerage affiliates of Wells Fargo & Company.