“One person pretends to be rich, yet has nothing; another pretends to be poor, yet has great wealth.” Proverbs 13 vs 7 NIV
Ever wondered why, despite our annual earnings and the appearance of doing better than our peers, we seem to be on a financial standstill year in year out. Could it be that something is missing in our money equation?
Many of us don’t understand the basic principle of money. This is why our money equation is flawed and in this article I will be revisiting a principle that contributes to a balanced money equation, leading us to be friends with our money upon mastering it. These elements are constant.
Live below your means
- What is living below your means?
To live below your means spending less money than you currently earning from your job and other sources of income. Living below your means does not mean you can’t spend money on the things you love in order to enjoy your life. It means that you make careful considerations to make your desires possible. Saving extra money, creating a budget, lifestyle adjustments and cutting back on unnecessary expenses are simple things. This is the most essential of all good money management skills that helps us to save, invest and make wealth. It simply helps us to create the money that we can use to achieve our financial goals.
- How do we put this principle to work?
- Understand the operating environment.
Many of us still live in the past where the economy was favourable. It is important to face our warning faith in the banking system and other financial institutions as well as the unfavourable fiscal policy. We can no longer do as much as we could before with the USD, now that we are using the local currency. The present economic environment has shrunk our financial capacity. Denial is common to men however we need to shake it off and make the necessary adjustments required by the present economic situation. We give our self the room to save and invest if make these necessary changes. Doing so will help us sleep better at night.
- Adjust your lifestyle
When the economy was favourable we upgraded our lifestyles. Some of us were living in nice suburbs and were now taking our children to range schools. There is nothing wrong with such choices when we can afford them but when the operating environment shrinks our capacity to service these lifestyle choices we need to do lifestyle audits and then make the needed changes without worrying about what other people will say. What other people think and say is of no value and what matters is what you can afford. Apply wisdom and downgrade your lifestyle so that you cut the hand to mouth cycle and stop accumulating debt.
Making financial changes to suit your financial situation is not a disgrace!!
Final thoughts
No matter how wealthy or poor you start out as an adult, this is the secret to maintaining a life of freedom to pursue your goals. The wealthy lose their riches if they live beyond their means and poor poorer if they do the same.
“The wise man saves for the future, but the foolish man spends whatever he gets.” Proverbs 21vs20 LBT
By Tarie Manyonga
