A popular saying goes “Time is money.” Interpreting this, it means whatever you spend your time on is currency. This is why you can spend, waste or save time the same way you can spend, save or waste money.
So like time, money goes into the things we hold dear. For us, it’s creating content for our blog, for you it could be clothes, data, food, transportation – anything.
I’d always wanted to write on finances and share tips that’ve worked for me but never just got round to it. Today is however a lucky day as we have Muhammad from “the Money Gist”. He’s just started his blog and it didn’t take too much convincing to feature him on here.
Without further ado, let’s say hello to Muhammad.
Have you ever wondered why often, people who earn less than others eventually become more successful financially? or how some literally started from the bottom and made it to the top, financially? Amongst a host of other reasons (that cannot be discussed here), the underlying factors for most people’s financial success are discipline, and delayed gratification.
While both terms (discipline and delayed gratification) might seem “tough”, it’s usually not that deep; because, very simple and subtle steps can be taken towards achieving them.
Check out My 4 simple steps to financial freedom. Again, it’s not that deep.
1. PAY YOURSELF
Let us look at spending from a different perspective; think about it; when you spend, you’re actually paying other people; seems pretty obvious right? Maybe not so much, if I add that while paying everybody, we mostly forget to pay ourselves. Yes! ourselves. We pay DSTV, we pay MTN/GLO… (multiple times in a month), we pay Shoprite, we pay Dominos, we pay Taxify, we pay Jumia, we pay the Government, even Dino Melaye (is our tax money na!). We pay everybody there is to pay, EXCEPT ourselves.
Please understand that I dare not to say they don’t deserve to be paid. I’m saying everybody deserves to get paid, likewise YOU.
Usually, setting aside 20% of your regular income is standard (but who standard epp?). I dare you to, start with 10% of your regular income! Nothing can be more convenient and appropriate at the same time. Feel free to pay the entire 90% to others for your living expenses (i think, that’s as fair as you can be to yourself). Setting aside 10% of your regular income can almost make no significant differences that would cause any inconveniences (see that alliteration?); and if you think it’s to small, then why haven’t you paid yourself more, all this while?
So, when that alert drops, when you make that sale, when you get that commission, make it a habit to pay yourself FIRST, before you think of any other person.
2. Control Your Expenditure
Now that we’ve agreed to set aside 10% of our regular income as payments to ourselves, it is important that we protect it and ensure that it doesn’t get eroded; because, as small as it is, it could easily be stolen by our insatiable desires (They are bullies).
How do we protect it…?
Yes! A budget is one of the most overlooked POWERFUL tools today. We have no idea what that list could achieve for us. For a start, it can save our 10% from the bullies
that kidnap it.
We need to budget our expenditure in such a way that the remaining 90% is enough to cater for our needs and our substantial wants; and while at it, we also need to track out spendings. Before you buy a thing, or include an expenditure in your budget, ask yourself this one question, If I don’t buy it, what would happen? If we are honest enough with ourselves, more often than not, we’ll end up cutting down on frivolous spending.
All that being said, you can have what ever you like (I thought of T.I too, lol). As long as you don’t have to expend the 10% we have set aside.
What are your thoughts? Is 10% too much? Should you really pay yourself? Do you pay yourself already? Do you budget?
I know we mentioned 4 points, but In my next post, we’ll be talking about Putting your money to work.