What term describes paying yourself first when you receive income?

• A. Pay Yourself First (PYF)
• B. Budgeting
• C. Expenses
• D. Debt reduction

Answer: (A)

The idea being tested is prioritizing savings by treating it as a non-negotiable step as soon as income comes in. This is described as paying yourself first (often done through automatic transfers to savings or investments). By making saving automatic, you ensure money is set aside before you’re tempted to spend, which helps you build an emergency fund and reach future financial goals.

Budgeting is related because it plans where money goes, but it’s broader and doesn’t specifically name the act of saving first. Expenses are the costs you incur, not the action of allocating money to savings. Debt reduction focuses on paying down what you owe, which is a distinct financial objective.