Africa-Press – Eswatini. Most of us are in serious financial doldrums not because of the bad economy, but because of poor financial decisions and habits.
Spending more than you earn is a recipe for financial disaster. It is like stretching your money like a rubber band, and the harder you stretch it, the sooner it reaches its elasticity limit and break.
“Live within your means”. I remember seeing a payslip with this statement and I was so impressed how the HR of the company was making an effort to advise its staff members to avoid over-spending.
Yes, the economy may not be in good shape, yet there are some people thriving in the same economy. On the other hand, there are people living in abject poverty in countries with very good economies. Whereas the economy affects personal finances, it is the personal decisions one makes about personal finances and what each person does with their money, no matter how little it may be.
Impulse and Peer Pressure Spending
At times people spend more than they have on what they do not need because that is what their peers are buying. As much as we all need friends, staying in your financial lane should be your lifestyle.
Know how much you earn, and spend according to your income.
The moment you want to buy what you do not afford; you are jumping into other people’s lanes. Before you know it, you are in serious financial troubles, and the next thing you will think of is borrowing. Buy when you need it and can afford it.
You may want to spend like your peers, who are earning more than you, or who have less financial obligations than you, that would be a big mistake. If you can’t afford the lifestyle your friends live, they are not your friends, stay away from the pressure of spending like them.
When you go out shopping, it is important to carry only the amount you need to spend on what you need.
You may come across something that looks very good yet you do not have enough to buy it, and the moment you buy it without thinking or planning, you will be biting more than you can chew.
Stick to what you need to buy, anything more than that is over-spending. Do not buy just because they are selling. If you can’t afford the clothes your friends are wearing, the houses they are renting or the food they eat, do not be pressured to match them. Live within your means.
If You Can’t Buy It Twice, Don’t Buy It.
Before you spend your money on anything, ask yourself if you can buy it twice. If from your income you can tell that you can’t buy something twice, or two items at a go, that might be evidence that you cannot afford it.
It is not only about having the money in the pocket, but having the capacity to replace that item in the event of loss or breakage.
Imagine you buy a phone now which you know you won’t afford again, and it get stolen, or the screen is broken and they price to replace it is beyond your means. Buy wise, and buy best.
Buy What You Can Afford To Keep?
When buying a car, you need to ask yourself if you will afford to maintain and run it. The purchase price of the car may be good or affordable yet you will find yourself running in other people’s lanes when it come to fuel consumption, repairs and servicing the vehicle.
With the high cost of fuel, you need to think of a car that is economic on fuel. This applies to many other items.
If you do not do this, you might just be sinking in financial problems slowly, and by the time you know it, it might be too late.
Borrow When It Is Necessary To.
Most of us have been told how bad debt is, but not all debt is as bad as it sounds. But that is a subject for another day. Sometimes you may need to borrow a small amount against future earnings because you have an urgent need.
This happens when you do not have savings or an emergency fund.
The idea now is not to borrow what is not necessary, and you may not afford to pay back. When you borrow money to spend on a ‘want’, something that is not really a ‘need’, paying that loan becomes a need.
You are already running outside your financial lane. A food and this money are soon parted, if you are not financially wise.
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