Remember that time you found yourself in the mall to get a few things and all you had on you was a
specific amount of cash after realizing you left your debit card at home. Recall that for every item you picked, you became so proficient in the mathematics you always believed was your Achilles heel all
through high school. I hope you have a clear memory of that scenario now, what you did then was to track your expense “you might have felt you did that under pressure to save yourself from an
embarrassment, truth is that’s how you should feel anytime you go beyond your tracker.
Tracking your expense requires you identifying your needs and wants, YES “wants” want may not be a necessity but it is a desire that you can fulfil, that you deserve to fulfil. This process can be
aching, physically and emotionally draining, but Congratulations, you have something that can relieve you. You know how much you earn, remember how tensed you were in the mall not to spend beyond the amount with you, this is how you would feel anytime your income is turning RED.
The best way to track you expenses is to identify them according to their basis of reoccurrence and period. Did that look confusing? Well, you got it. There are some things that occur repeatedly; your transportation, feeding, toiletries, utilities bill etc., and the second part is your “savings”. Savings is that part of your income that you defer for long term consumption – wants that you cannot afford the cost at once but rather save towards.You need to filter your wardrobe in 6 months, your rent, get that bag, or even a vacation. Savings should not be confused with Investments; they are different, misunderstood
terms that are used interchangeably, albeit, wrongly. Investments must earn an income while savings
does not; the third is “the emergency fund”.
Tracking the first part should be the easiest because you are familiar with the timing and the amount you need, if you wake up any day and realize you do not have your transport fare for the day, then you have failed somewhere (by reckless spending)or has been failed by an incident (may be a robbery). I would not tell you how much of your income should be in this first segment due to basic reasons, you might be earning the same income as another person, but hardly can you have the same expense tracker, your colleague might be living where cost of accommodation is borne by a third party while you are the one responsible for your rent, preference in style of leaving, definition of comfort is distinguished by individuals. The most important thing is to be on track. Someone who plans to spend 5,000 naira on feeding and spends 5,200 has fallen off track, compared to someone who planned to spend 10,000 naira in the same food and spends the actual 10,000 naira, that person is on track. It is not how much in absolute terms rather the proportion, and what you planned to spend that matters. This expense must be identified, pick up a pen and do a total estimate of it, its helps you as a greater percentage of your income is consumed in this segment.
The second fraction is your wants that you save towards. It’s simple to plan to expend, picture this at the beginning of the year, you realize you want a Zara modern women bag collection at the end of March, it’s not advisable you pay for the bag when you receive your March pay, an alternative if the cost of this collection is 150,000 naira ,why don’t you save 50,000 naira every month till March in that way the burden is spread among 3 monthly income and trust me you would get your Zara bag by March. Ending happily without having sleepless nights on how you would survive till your next pay day.
The emergency fund has been misunderstood by most people to mean savings, remember I said your savings is towards a goal, but the emergency fund doesn’t have a goal, you don’t have an idea of what it is going to be, if you have identified something as an emergency then it is not because you have
identified it. I would recommend 10% of your net income per month should be saved up as emergency, if you don’t have a reason to spend it for any emergent reason, then you should not spend it for an expense we have identified in the earlier category, you should keep up funding the account. Do not ask
me for what? Remember we have not identified it.
All the three segments have been identified, this means you cannot just go for a stroll and just spend an unplanned 5,000 naira. Whatever you expended it on should fit in to any of the 3 segments identified above. Isn’t that easy? Well there is no need to be under pressure. Slow and steady, you might start and realize you fall off track. It is not a suicidal act remember all it requires is going back to your expenses tracker, it might require you reclassifying the tracker or even drawing up a new one. Every penny can be spent but after spending you must not have any feeling of regret.
By:Mashood Bolajoko Maryam
Contact:[email protected]
https://insightlinks.net/2019/01/16/spending-with-no-regret-by-mashood-bolajoko-maryam-0/
