Hey, I hope you have an emergency fund and/ a financial cushion should in case things go wrong? Well, if you don’t, then you are putting yourself at the risk of going to get a loan when things are down and one negative side of loans is that they are triggered by impulses which often come as a result of no other option to take and this loans can go as high as 10% to 40% in return. This is what you get when you do not have any savings. Why do people not have cash saved up for days of emergencies? The answer is how they spend money. A lot of people are interested in growing the GDP of their country than growing the financial status of their lives.
Spending helps boost the GDP of a nation but spending wisely boost your financial status. Buying a Starbucks coffee isn’t a bad idea but preparing your own coffee from home at 1/3 of the amount made at Starbucks is good for the account. There are so many things that we realize late that we were just wasting money on. For instance, buying things to impress people who do not care if you existed.
One way that people boost the GDP of a nation and not their finance is through addictions. We are more likely to spend money on things we are addicted to than things we find necessary. The amount of money some people spend on drinking alcohol, gambling and smoking cigarette will be shocking at the end of the year, and you will be forced to ask if the person didn’t have a second thought about it but as it is, addiction help grow a country’s GDP and not the personal pocket.
Another things that eat into people’s finance is high interest on loans. When people swipe credit cards through POS machines, they just get into future debts so as to purchase something presently. When this debt becomes really high that it becomes practically difficult to pay the debts, then interest rate starts to skyrocket. Borrowing money for liability is a very bad idea and people do this, they end up being unable to pay their debts which in general still eat up the funds of the individual.
In conclusion, if you want to grow your finance, be ready to manage your spending so you do not become a financially handicapped person who do not have any emergency fund, any investment and just place hopes on paychecks.