Hello everyone in the wonderful hive blockchain. I hope you're all doing well and enjoying the weather wherever you are. Once again, I'm grateful to the hive learners’ community for their amazing initiatives.
The hive learners’ community has again presented us with another amazing topic and I'm so glad to be participating in it.
Growing up, we all have learned a thing or two about money and how we can use it wisely. Money is one of the most important things one can possess. Money can get you expensive Rolexes, beautiful Teslas, big mansions, expensive sneakers, shoes, and clothes, you just name it. But if you don't know how to use your money wisely, you'll end up using it for the wrong things and at the end of the day, you'll end up getting what you WANT not what you NEED.
Budgeting is one of the important lifestyles we need to learn and make good use of in our everyday activities. A large percentage of people, especially the youths, have no idea of what budgeting is and how it can be useful to them. Using Nigerian youths as a case study. Due to the country’s poor economy and low employment opportunities, the youths get involved in illegal activities such as online scams. And when these youths finally get something (a huge amount of money) from their illegal activities, they spend the money lavishly on useless things. When they exhaust the money, they go back to being broke again. Imagine a person buying a bottle of alcohol for 400 thousand naira in clubs, just for him to waste it by pouring it on his phone or using it to wash his wristwatch.
When I was in the 100 level, first semester, one of my hostel mates who came from a poor family background, got more than 600 thousand nairas, and he squandered it all in less than one week. When I asked him what he used the money for, he couldn't say anything. Apparently, I later found out he and his friends squandered the money on drinks and other useless things.
Personally, when it comes to making budgets and spending wisely, hustlers ( those who put their time, energy, effort, and abilities into their work/ those that work legitimately) can define it best. When you work hard before you make money, then you should know how to budget and spend your money wisely.
Growing up, I was the type of kid that loved saving. I used to save my money inside a clay-made piggy bank (even though most of the time my mom used to claim it, saying it is for my Christmas clothes). And at the end of the year, when I break it, the first thing I do is to make a plan for my needs and wants, and after buying everything I’d still have a little left. My mom was always impressed whenever I did this because she never taught me how to budget.
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Even salary earners (those who work hard every day, toiling in the hot sun), can spend their money uselessly if they don't know how to budget. There are salary earners, who after a few days of receiving salaries, they go broke again. Why? Because they don't know how to budget. No matter the type of work you do or the amount of money you earn, you need to know how to budget.
Why do I budget
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As I said earlier, I started the habit of saving and budgeting when I was a kid, and today it has become a part of me. The reasons why people budget are different, for me, the main reason why I like to budget is to avoid unnecessary spending.
Money is good, it definitely can do a lot. When you have money, for example, when you just receive your salary, a lot of things will become attractive to you. You'd want to buy that nice black shoe, the beautiful wristwatch that you saw in your friend’s hands, at that moment you might even forget about important things like foodstuffs. Well, that is why budgeting is very important.
It helps me prepare for rainy days. Life is filled with unexpected happenings. There are days when you'll need money to settle an emergency case. That is why it is very important to budget for emergencies so you don’t get caught off-guard.
How do I budget?
The first thing I do is to compare my money to my expenses. I check how much I have and what I want to buy.
The next thing I do when I earn an amount of money and I'm ready to spend it is to make a list of my needs and wants. This next thing is to make a scale of preference; the list of what I need according to the order of importance. This will help me to buy what I need the most before I exhaust my money on other things.
Most Importantly, I make sure to save a little for rainy days. As I said, life is filled with surprises, and I'm sure you don't want to be caught off-guard. For example, your cellphone might get spoilt or stolen, and since you've failed to budget well, you'll have to pay the price.
Factors to consider when budgeting
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As a salary earner, a student, or a teenager, here's a list of the factors to consider when budgeting.
Income: The amount of money you earn is an important factor to consider when budgeting. The amount of money you make will determine the type of products you'll budget to buy.
Needs; firstly, it is very important that you differentiate your needs from your wants. Needs are things that are necessary for survival and MUST be bought.
Wants; wants are things that are not necessary for survival but desired. Examples of wants; expensive wristwatches, designer bags, expensive perfumes, and so on. Make sure your needs come before your wants.
The price of goods; you should also consider the price of goods when making your budget. Are you in a period of inflation or deflation?
In conclusion, the art of budgeting is a lifesaver, learn it and make good use of it.