Money is necessary in life, which is why having a reliable source of income is important. I stressed the word ‘legitimate,’ since there are a number of illegitimate sources of income that can land an individual in hot water. Job offers financial security and confidence because you can proudly tell people what you do for a living, and you will be confident that if you have a need, you will be able to meet it when you earn your salary or paycheck. That is the primary incentive for people to go to school or learn a skill, so that they will be able to find jobs quickly after graduation. Several people often express a willingness to change jobs in order to achieve a higher-paying position because their current pay is insufficient. And the rich constantly complain about their low wages and salaries, and the more money you have, the more things you want to purchase. According to common opinion, the wealthy get richer while the poor get poorer. That argument has a grain of truth in it.
You can gain insight into why the wealthy are wealthy if you are able to examine how they spend their capital. When you ask a wealthy person for money, he may want to know what you intend to do with it, and if you don’t have a good answer, he may refuse to give it to you. It’s not stinginess that you’re looking for, but rather experience. A rich person does not spend his money on impulse; he has a plan in place. What you should understand is that if $50,000 in a month isn’t enough for you, $150,000 won’t be either. The reasoning has nothing to do with the amount of money you have; rather, it has to do with how you spend it. Your paycheck or wages will not only be adequate, but also secure, if you develop a good spending habit. There are a few things to consider before investing your money to avoid having to pay off loans every time you get paid.
These are the habits that will quickly deplete your bank account;
1. You don’t have a budget, which means you haven’t set aside a certain amount of money for a specific purpose or operation. You are given $150,000 a month but do not make a plan on how you will spend it. When the purpose is unclear, abuse is inevitable. You can buy whatever you want in this case, including both necessities and non-essentials. It also has a negative effect on one’s earnings in the long run.
2. You don’t save—you don’t set aside a certain amount for a “rainy day,” that is, a day where you won’t have any money because your salary was not paid or wasn’t paid on time. The fallacy is that you already believe the money is insignificant and that there isn’t anything to save. Do you know that saving $100 a day for a year would net you $36,500? Consider this: if you put aside #500 every day for a year, you would have amassed a total of $182,500. That’s a sizable amount. You wouldn’t have anything to fall back on if you spent all of your money.
3. You are living beyond your means: your monthly salary is $120,000, while your friend’s salary is $250,000; yet, you rented an apartment for the same amount because your friend rented an apartment for $750,000 a year. If you didn’t cut your cloth according to your height, your salary will never be sufficient. If you just buy what you can afford, you won’t end up in debt.
4. You’re dissatisfied- You have a plethora of handbags and shoes, but they’re never enough. Even if you are aware that you are in charge of your paycheck, you will still buy when someone comes to your office to advertise shoes and designer wears because you think the ones you already own are insufficient. You’ve invested it all until you get paid at the end of the month, so you can collect another paycheck. This habit depletes your earnings much more quickly than you would think.
5. You live a fake life style
of the biggest reasons that so many people get into debt and have to repay it month after month with their income is that they live a fake lifestyle. You can’t afford expensive clothes and shoes right now, so you borrowed money to buy them to make people believe you’re rich. Taking out a loan isn’t a bad idea, but it should be for something more substantial than shoes and clothes, such as an investment or a piece of real estate. If you keep doing this habit, money will not last long in your possession.
6. You live to satisfy others-difficult It’s to avoid offending those groups of people while making big life decisions. Your friend is throwing a birthday party and has chosen a uniform that all guests must buy and wear. You know you don’t have enough money, but rather than wearing the cloth you have, you borrowed money to buy one so you wouldn’t offend your friend. Two months after the wedding, you’re already making payments on the money you owe. This is a poor decision because it prevents an individual’s income from being adequate for consumption, far less saving or investing.
7. You don’t invest—that is, you don’t spend money on things that can bring in more money in the near future. Having a part-time job that pays money every day in addition to your normal job is an investment, as is building a house with the intention of renting it. Buying a small car and entrusting it to others to drive for public transportation is also a wise investment. You have a range of lucrative investment options at your disposal. A lack of investment will result in a person accomplishing nothing over time.
8. Gambling is a common but difficult to break habit. Gambling psychology is easy to understand. When you first begin, you will be assigned a number that will serve as a bait for the organizers to entice you in. You won’t want to leave because you can’t let the money you’ve spent go to waste, so you’ll keep hoping that you’ll make more money even though it doesn’t come. After that, the loop repeats itself. This behavior can lead to debt and the eventual sale of a person’s home. It impairs one’s ability to progress in life. To prevent making a negative effect on one’s life, it’s preferable to leave early.
A Ponzi scheme is described as “pay $30,000 to get $60,000.” (Ponzi scam). This is an excellent example of a Ponzi scheme. What you don’t know is that no one outside of their family cares and tells anyone about such an opportunity. There are no freebies in existence. And our parents do not teach us for free; they do so because they love us and want us to excel so that we can make them proud in the future. They also want us to become self-sufficient so that we are not a burden to them. Human nature does nothing for free. If someone asks you to pay a certain amount in order to receive a larger sum, you will initially believe them, but if you keep going, you’ll realize it’s all a scam. There is a difference between gambling and Ponzi schemes. They reduce one’s income and can lead to depression if one spends all of one’s earnings and has little to show for it.
These spending habits have an effect on both one’s income and one’s life. To live a happier life, it’s preferable to make any adjustments that matter to you.