It is an abomination of an idea for someone to habitually and unnecessarily spend above their earnings. I know you are probably one of those doing it and you live in a world where many people do it.
But, let's see if we can be different from the rest. Let's try and be more judicious in our spending.
If you want to contribute to this discussion, feel free to read till the end. I'm looking forward to your input.
The idea of unnecessarily spending more than you earn is something that is built out of nothing other than indiscipline, poor financial decision and sheer desire to live beyond one's means.
Of course, this isn't a dig at anyone and I understand that there are times when it becomes unavoidable to spend more than you earn. But look at the awful spending habit that many people have at the moment.
The issue of poor spending habits is visible at multiple levels in various economies. Individuals, businesses and government are all guilty of this poor spending habit.
Whenever I go shopping like I did yesterday, once I get back, I usually look at the things I bought to know if I can find any reasonable justification for the money I spent.
The fact that we are in a period of recurrent inflation makes it harder to buy many things with the money at hand and this is why it has evenly become more important for us to spend wisely.
You'd know that your expenses should be taken care of with your earnings, right?
This is the mindset you need to have. I know there are other alternatives to be explored when you have expenses that weigh higher than your earnings but don't allow yourself to easily dive into those alternatives.
For example, if you want to travel for a holiday and your earnings happen to not be enough to cover the expenses, you can walk into a bank and apply for a loan. You can also get a loan app or meet loan sharks. You wouldn't be the first to be doing any of those.
One thing you need to know is that if you are the type that always borrows whenever you have needs/wants, you will end up habitually spending more than you earn because you know that borrowing is an option.
In the long run, your debt will also grow significantly and this will make a great percentage of your earnings to be channelled towards writing off your debts.
Is there a justification for the million dollars you have been spending on so many things?
That's an important question right there...
From what I've noticed (especially in the case of government), it is only when they run into a huge debt that it becomes clear to them that they have been spending an awful lot of money on things that are not really a priority asset.
There used to be a system that involves drawing up a scale of preference which helps you to know what ticks as a priority. What happened to that?
When you fail to weigh your desires on a scale of preference before splashing money on them, all the money you spent will end up as a representation of the number of poor spending decisions you've made.
It's all a sign of reckless spending.
In a nutshell, if you habitually spend more than you earn, you will run into debt. Those that have been there before can attest to the fact that being a debtor is never a good experience.
We will most likely be looking at the best time to spend more than what you earn and ways to cut down on your expenses in the next post I will be publishing on Leofinance.
Look forward to that.
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