Victor is gainfully employed and works in a highly blue-chip company. In the league of employees, he occupies a cadre that other employees envied. His monthly income that is in the seven figure range confers on him a financial power that can hardly be matched among multitudes of employees. You could smell affluence around him, and he is the type that will show it to you if you appear not to notice him. But that is the beginning and end of everything about Victor.
Despite years of working he has nothing to point at as a proof that he is earning good income every 30 days.
Going by what he earns every month, he ought to have become employer of labour but, for some years now, a month has never passed without Victor borrowing money from one colleague or the other.
It was a concern among his colleagues who are privy to what he earns but couldn’t understand where his money goes within few days after each month’s salary is paid. And yet not that they could notice any substantial project that he is committing money – at least they have waited for some time for him to announce something. Such is the kind of life Victor lives.
An unplanned and uncouth lifestyle of spending above what income can permit is a recipe for a future in penury. If any man fails to plan and keep good track of what to spend money on, he will end up spending frivolously, and most of the spending would not be on what brings real values. The outcome of such a way of living is wastage and lack, on one hand, and a life without meaningful achievement, on the other. If you develop an uncontrollable knack for money spending, or if when you sight products you can hardly control your urge to possess them, it is clear you are not disciplined enough to think about the importance of the products.
A good money habit requires that you carry out proper budgeting before you spend. This will enable you to identify all areas you need to commit money and to think carefully to apportion the money in your hand without having to regret it later. A typical pattern of spending covers such areas as personal upkeep, socio-spiritual obligations and reach out to relations. These identified areas send money out but the only one that retains money in ones pocket and ensures the future is well prepared for is the portion that is saved – the seed to be planted for greater earnings.
Saving money is a difficult thing to do, especially when there are many needs requiring attention. But you can make savings a very easy thing to do if you treat it as one of the numerous needs – just like a need to eat food – and you make it a top priority. In this wise you are able to make provision for savings when you are making provisions for other need like food, transport, clothing, etc. What is expected is that before you start to spend the income, you should first set aside the amount meant for savings. You may have to fix a percentage of your income that should be your savings.
The financial experts would recommend 10 per cent, but I would say it should be as much as you can spare, but not less than 10 per cent. Your savings should be a function of your vision and life goal. The bigger your goal, the higher your savings should be. You need to save more when you haven’t started raising a family or when your immediate dependants are few in number.
When money enters your hand, on no occasion should you set aside lower than what should be for savings – but it can be higher. The remaining money can then be spread over other needs after you must have taken care of the mandatory spiritual obligations (the part that belongs to God, if you are a believer). It is after the savings has been removed and sent to where it cannot be easily consumed that the remaining part of the income should be apportioned to the identified need areas.
With what had been identified above, it is not more than 70 per cent of your disposable income that is left to take care of personal needs, wife or husband, children, housing, clothing; without neglecting responsibilities over extended family members, social and societal financial duties, etc.
. Ola Emmanuel is a business planning and cooperative consultant. He works with a team of international consultants to conceptualise and plan agribusiness and housing projects. As a certified trainer authorised to use the International Labour Organisation’s enterprise development modules, he trains entrepreneurs and organises workshops and seminars for potential and practising entrepreneurs as well as business managers and cooperatives. He also speaks and facilitates at leadership and management workshops on invitation. His book, Business Planning Made Easy: Step by Step Guide On How To Turn Your Idea To Profitable Business’ is the latest of the books authored by him. Tel: +234(0)9068602954 (call and sms), +234(0)8023257707 (WhatsApp only).
Follow The Eagle Online Channel on WhatsApp
