Once you learn them, you cannot unlearn them.
Being practical about money issue is a virtue I’ve so much learn from Morgan Housel.
So here’s another one point from experience, observation and study.
It is very difficult and constitute extra work to track all your day to day expenses.
A practical way to manage that is to save before spending.
Spend the remainder and only track the major things that you spent on.
Transport may be easy N500/day * 20 days. Now you know that.
One off purchase of another phone etc.
Here’s the novelty in my idea
It is easier to track every extra penny you spent above what you erstwhile earmark to be spent. So track all the extra.
Know the things you spend them on and determine if they are one off or recurring.
One off? Fine. Knowing is enough. ?
Recurring? You need to make allowance for it in your next budget. Yes.
This is necessary because withdrawing from your savings/investment for monthly over is a bad habit to cultivate.
Another mistake that a lot of people make is bite what they can’t chew.
Saving/investing 70% of your income when you you have a parent to support and siblings to cater for.
PS: this is assuming 30% is not usually enough for your monthly expenses.
It is not a bad financial decision to support your family. Who thinks such to be bad!!!!
Well your expenses should be kept under not necessarily by tracking every penny but by following the model I put up there.
Some money lessons again.
Earlier today I went out and on getting to the bus stop I wanted to take a bike to my not distant destination which usually cost N50.
Except this time around, I was being charged N100 which to me isn’t a fair price. So I refused to take the ride. But right in my presence, others where taking the ride for sale destination for N100. Well I didn’t and I trekked down the road in a few minutes.
While trekking down I started asking myself questions about the interplay between money and value. Money is no news doesn’t have no worth except that which the community has agreed to give it.
Yes. Only on trust does money thrive, Naira is less trusted than the $$ that’s why $$ is more widely acceptable than the Naira. In the barter system, trust is not needed because you exchange value for value not a representation of it.
Something came clearer to me as I walked down.
I didn’t take the ride because the value I accorded to the comfort it will give is not up to the comfort I will get from keeping the money and taking a walk. Beyond that I realized if I had given him the money, what I was doing was this…
Take this “representation (money)” as an indication that you have provided a value to society worth this amount of money. This representation can be then taken anywhere else by him to also get something of value in return. And the endless loop of that.
Civilization and the quest for growth brought about the innovation called money. But money is only a representation of value not value in itself.
Then I realized you might have been chasing after the wrong metrics all your life if such chasing has been after money.
Money is a representation.
Representation of what?
Representation of value.
It follows then that what you should be optimizing for is value.
What value do you or can you bring on the table? That’s the question you should be asking yourself.
Once you provide value to the society, society is obligated to return that value to you and many times that is done via money as a representation. I said many times because it is not always so that money is the only means of exchange.
I am providing you value now by sharing my knowledge with you and the best I can get in return is your engagement with my thoughts and perception of me. But yes, that too is an exchange for the value I create. What makes money necessary is that it puts context to value exchange.
Your perception of me is not tradable in the short term. But if you had paid me to share this, that is tradable.
Money runs after value and value my friend is what you should be optimizing for.