Checklist For Money Habit

By Ola Emmanuel Having already devoted two weeks to the money habit issue, we shall treat the issues already raised by readers in the question and answer column so that we can go straight to the checklist that is germane to financial security. To locate your spending habits, carry out the following personal checks. • Do I make up to the money I spend? Anyone who spends above his or her income is clearly operating a bad money habit. • With the way I spend money at present, can I sincerely say that my financial future is safe and guaranteed? • Can I really say that I really need the product I am about to buy? If your answer is ‘no’, you are about to spend money on a product that you not really need. • If the amount of money I want to spend on a product is significant enough to contribute to giving me a better and secured future and I can do away with the product at the moment, will I be willing to suspend the buying of the product till later date? If it is difficult to delay the immediate pleasure you may derive by not spending a particular amount of money today, it may be a tough call to meaningfully build savings to achieve a higher goal in future. • Is the product necessary, so urgent and so important to your immediate well being or it can wait till other time? The basic needs of life such as food qualify as necessary and important. You need this spending for your present well being and to enable you have a better future but if it becomes without measure and uncontrollable it can lead to gluttony and make you become wasteful. • Do I always think of the product I want to buy and make a list before I make my purchases or I just buy as the products catch my attention? If you have the habit of buying products without first planning and budgeting for it, you are not only an impulse buyer, you also operate bad money spending habit. Any product you can buy immediately it catches your attention should be one that you had planned for before but which you haven’t procured. List out what you spend money on. Study your list for a while and determine whether you are actually spending well. Remove not so important things from your list. • What do I need to put in place before I can conveniently embark on acquiring certain products? It is important you know the level you should have attained in life before you should go after certain products; otherwise you may find yourself putting the cart before your horse of life. • Is the product I want to buy too expensive and can I really say I get value for the money I want to pay? It is your duty to be on top of the market to know what competition is doing. You are not doing anybody any favour by paying exorbitantly for products, rather you may be celebrating your ignorance and lack of entrepreneurial instinct. Are there substitute products that can give good value at fair prices? • Are you paying higher for the avoidable goods and services? • What exactly do you need? Is what you want to buy a need or a want? Some Useful Steps to Take: After you might have seriously considered above issues, you can go further by considering the following steps. • Make it a habit to always classify products you want to buy into necessary, important and urgent categories. Move the money earmarked for not-so-necessary, not-so-important and not-so-urgent products to your savings and investments. • Do market surveys to find more competitive prices of products. Paying more as status symbol has a way of depleting your treasury at the expense of wealth creation. Consider your purse and your future goal very well when taking buying decisions. • It may not be proper to consider changing taste and lifestyle when additional expenses cannot be conveniently accommodated by your incomes. It is your responsibility to tackle and overcome peer pressures. • Plan your purchases before setting out to spend. It is a bad habit for one to walk on the street and be pricing products you have not predetermined to buy. • Budget properly for food, education, your personal development and knowledge acquisition, your wards, social engagements, home front, your recreation, utility bills, wear and tear of properties, etc. Check your food consumption habit. Occasional indulgence for a change is not bad but it shouldn’t become an uncontrollable habit. • Learn to close your eyes to products of no real value. If you don’t buy it, it will not take anything away from you and it will not impair your life when you do so.

Overhaul Your Money Habit

Are you someone who can own a business or can build enduring wealth, a fundamental sign is ability to save some amount of money even when you are confronted by too many things to spend money on. If you have the habit of spending all or above the money that comes into your hand, it will be difficult to move yourself to the realm where you can think about having a financial legacy. Let’s refresh our minds with this assertion: Financial responsibilities will always increase to meet the amount of money one may have. Or naturally, there are too many things to spend money on therefore whatever money that may come into someone’s hand already has myriad of needs waiting for it to take it away. To some, they are quick to borrow money to clothe themselves, to keep up with peer pressures, to satisfy some other needs or meet certain financial responsibilities. They find it difficult to keep their spending within their income. In these people, the will to discipline their desires to fit into their means is lacking. Not only are they not thrifty, they are actually in debt in order to satisfy personal desires. To become an achiever, the starting point is ability and discipline to spend less than you earn. Not that the income may be sufficient to meet your needs in the first place, but it is a duty to discipline yourself to spend below your income. It is a sacrifice to make; that is why it is called delayed gratification. It is wrong to gratify all your desires as soon as they show up. Some desires should be delayed today so that a better tomorrow can be established when the desires satisfied in the midst of surplus. In the face of rising costs of basic necessities, it calls for special ingenuity from anyone who wants to achieve something meaningful to properly manage whatever money that comes into his or her hand. But some people deliberately live lives that cannot be supported by their incomes. Not a few of this group of people have worked themselves into troubles by their false lifestyles. Before they realise themselves, it would have been too late to start anything meaningful that is longer lasting and life-sustaining. Many in their pride would have gone too far on the wrong lane that it becomes so difficult for them to adjust and bring themselves back on the right track. They fail to realise that the real strength in human being is ability to own up and be humble enough to make correction when it is certain that the way one understands life is not really what one thinks it is. To overhaul your money habit, you need to identify all your financial needs and responsibilities, understand the needs that are necessary, the ones that are luxuries, the needs that are important and urgent, the ones that are important but not urgent, and the ones that are neither important nor urgent (i.e. ability to prioritise personal financial obligations and responsibilities). Also, not a few believe that when they finish the money in their pockets today, they can always ask another person to give them more. Their attitudes and mentality is like the person they are asking money from doesn’t know how to spend money or he has too much that he cannot spend therefore he should transfer it to them to help spend it. Many people desire to own properties or have their own businesses but their present consumption habit may be the bane of their financial success and the obstacle before them that will not allow attainment of their targets. It is natural for human being to pick up consumption habits. When some of these habits is indulged unchecked, it will lead to what can hardly be managed or controlled. This is what makes some pick up untoward behaviours and they become huge problem to the society. When you choose a lifestyle that cannot be supported by your income, sooner you will be tempted to seek means of gratifying the lifestyle in noxious ways. Conduct a check on how you spend money and what you spend money on. Do you spend money without plan? Are you an impulse buyer or do you buy things that afterward you begin to ask yourself why you buy it? To emphasise Robert Kiyosaki’s submission, clearly some products or properties are actually liabilities, not assets. Some people run frantically to acquire liabilities that they think are assets. In exploring this money habit issue, we are going to examine some challenges and give a checklist to help.