1. Having the thought that tomorrow will always be better
Optimism is a good quality to have, but having too much optimism can be dangerous, especially when it comes to money. We leave in a world that is full of uncertainties. Even rich or wealthy people suddenly become bankrupt. (I am sure you know some examples in the entertainment industry) People tend to assume they will earn more in the future and so feel they can afford whatever they want now because tomorrow will be better.
"The rule of thumb should be to live below your means" or cut your coat according to your size (the new version is cut your coat according to the cloth – which I seem to prefer because some people’s tastes or sizes are just way off the charts).‘Pay your future first, and make sure your present is secure.’
2. A tenth of what you earn is yours to keep
For those that earn an income even before you receive your pay check, some monies have already been deducted….that already is government property my friend. From your disposable income you get to pay your tithe (that is, if you are faithful Christian tither). After all deductions have been made, the outstanding is for your upkeep. Would it then be wrong to pay yourself some money too? Would it be wrong to have some savings? Like was noted earlier, life is full of uncertainties and there is need to make adequate preparations for the rainy day. Not saying you should be an Ebenezer Scrooge and deny yourself the good things in life. It is all about moderation and trying not to live for the moment – tomorrow is on its way.
3. Not talking about money when you're planning to get married.
Intending couples discuss about many things; how many kids they would have and other plans… but when it comes to finance, there seems to be some pause. Probably the man feels discussing such would expose him or make him not to look so good in front of his woman. The woman on the other hand, believes it’s the man’s duty to make adequate provisions. However, it is a good thing to discuss personal finances, spending and financial plans with your partner so that you both will be on same page. Having a common pool of funds gives a couple more leverage rather than if incomes were distinct to each individual.
Too many people spend an absurd amount of money to have a huge wedding. Imagine spending up to #1,000,000 for just a day’s event. Yet there is so much ahead of you - you need to plan for your rent, to plan for the kids, to plan for your upkeep, to plan for exigencies etc. And it is sad to hear that people even borrow for the purpose of having such an event. If you must borrow, why not take a mortgage or a business loan or get a land and sell after it must have appreciated. It is better to borrow to get an asset than to offset a liability.
5. Going all out on the first kid or even other kids
Kids are a bundle of joy to any family and it is the job of parents to take care of them and raise them well. However, studies show that there is an overspend on top of the line cribs, clothes, and toys for the first child that comes into the home. Another trend that is fast developing is that of crèche and day care. Apart from the busy nature of most mothers these days and their inability to get reliable house-helps, they feel the day care/crèche is the next best thing for them. But what seems to be disturbing these days is that it now seems like a status thing – ‘I put my child in crèche X and I pay N100,000’ (yet the child is just barely a year old). As much as you want to give your child the best, always ensure that you are not going overboard. Also, remember that exigencies can occur so provisions should be made too.
There are many other mistakes people make. Share your thougts in the comment box. Also, look out for our next post "ways to grow your income".
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