All of us suffer from the urge to splurge and we justify our spending using the pretext of special occasions, peer pressure, lifestyle, family, emotions and even smart decisions. Most marketing companies understand this urge and try to exploit it by making offers that give consumers the false notion of having made the right decision. Unhealthy sausage roll, plantain chips, carbonated drinks are sold with promises of happiness, adventure, youthfulness, etc.
When one could do with a N20,000 phone (within budget), with the latest versions of smartphones in the market today with the false sense of smart decision and instead makes you buy a N45,000 phone (overstretched budget). Spending wisely is not being stingy but being smart and aware. Every kobo spent on unnecessary urges contributes to lost wealth. According to Warren Buffett a financial expert said, if you buy things you don’t need, you will soon sell things you need.
The questions you should always ask are these: Do i really need this? Am I overspending? Can I save some money without compromising on the value i want from a particular product/service? Encourage your family members to follow this path.
As said in most of my write-ups that you should always save for the unexpected “emergency fund”. Remember! Someone’s sitting in the shade today because someone planted a tree a long time ago. All of us know that saving is important for a better future. But it is alarming to observe that most of us do not even save enough for emergencies. This happens because most of us are not enlighten on personal finance.
Instant gratification today matters more than saving for tomorrow. In fact, saving is perceived as sacrifice by people because they believe anything can happen to them at any point in time, I mean death, which is the reason most us refused to save for the future or for emergency.
Experts come about with “pay yourself first” principle. And always set aside money for your future goals (and risk) as soon as you receive your monthly paycheck. Take professional advice to know where and how much you should invest for achieving goals. Warren said, don’t save what is left after spending; spend what is left after saving.
Think long-term and be patient, Money is part of nature, it doesn’t grow overnight. However, we overestimate money we can make in a year and underestimate what we can make in 10 years. People make money by staying invested for the long-term and without doing much “dancing in and dancing out” i.e. changing portfolios frequently. No matter how great the talent or efforts, some things just take time. You can’t produce a baby in one month by getting nine women pregnant.
Make a diversified portfolio based on your risk appetite and financial goals. Pick right financial instruments recommended by your financial advisor and invest regularly and persistently for the long term.
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