Standard of living talks about the level of wealth, comfort, material possessions and necessities available to you. This, in turn, determines the socio-economic class that you belong; while quality of life reveals a lot about how happy you are with life. With this simple description it is possible for someone with wealth, and material possessions and some degree of comfort not to have good quality life.
We are in a period when people spend money and they are continually overwhelmed by financial responsibilities that they don’t know how to tackle. Therefore you hear all manners of complaints about money and rising costs of living. One of the followers of my radio and weekly published column who earns N80,000 as monthly pay was lamenting about the insufficiency of the salary in the face of his huge financial responsibilities. The same was the complaint of Roland Emmanuel who earns less than N20,000 monthly but I spend N500 daily for feeding and transport. He is an only child of his parents, just 20 years old; and he is saddled with the parents’ responsibilities. This 20 year old boy desires to go back to school in an environment where costs of living keep increasing and the real value of each unit of the currency can hardly command any value. Because of the higher costs of products in the market, everyone craves for more money; and workers are using different strategies to agitate for higher pay.
Now, the fact is that higher pay doesn’t lead to higher income and does not translate to better quality of life. You may change your job to earn big money or you get your employer to increase your pay but it takes a lot more before it can translate to increase in real income. Both internal and external factors act on what people earn to determine what value they really get from income (money). If you are earning a million naira per month, by nature, your needs will rise to meet the income. Responsibilities have a way of increasing to meet up with pay. Your expenses have a way of keeping up with your income. When there is more money in your pocket, something in you begins to demand for the kind of food you have not been eating before, you want to change your clothing, or you crave for a better car. Suddenly you want to acquire some products or lifestyle you have been turning your back on. What can be considered ‘wants’ before the increase in pay suddenly become ‘needs’. As you upgrade, it will attract attention and your family members are coming up with higher demands and the new social relationships and organizations that your new status bestowed on you are to be maintained also. Therefore, the higher the money that comes into your hand, the higher the probability that what you spend it on will also increase.
For you to get increase in real income it is either you are able to increase your earnings while maintaining your present level of expenses (costs) or you maintain your present earning and work to eliminate wastage spending or reduce your expenses. The two key elements to make this happen, within your control, is proper money budgeting and financial discipline. But while money budgeting and financial discipline is within your power to do, you cannot control increase in prices of products. Price changes are determined by external factors (outside your control). Some products’ prices change in response to prevailing situations and circumstances in the country or region, which will impact on costs of materials and wages; though there are some instances that abnormal price increase may occur as a result of more money in the pockets of some people. Here, it is either price goes up because more people are demanding for a product or sellers deliberately jerk up price because they know some people have received higher pay and they want their own share of the booty. The outcome of this is that you earn fatter pay but you also pay fatter prices for products that should ordinarily cost less. Your real income will remain unchanged or you are left worse off. In this instance, despite now earning higher pay, an income earner may not feel any positive impact higher pay ought to confer or his quality of life – and the runs through the cycle of agitations will continue.
Ola Emmanuel is a business planning and cooperative consultant