Back to Basics

At its core, personal finance is all about how we make financial decisions: earning money, spending money, investing money, borrowing money, lending money and even giving money. These decisions should be well thought-out before executed.

They say money is the root of all evil. Like it or not, it is an indispensable part of our lives. Expenses begin the day you are born. They accrue as we grow older. It only ends when we are no longer physically around. We need to work to fund all our needs. We must exercise caution with our finances otherwise, wake up one day with nothing left in our pockets.

Most young people who enter the job market live in the here and now, spending every centavo earned on mostly wants, endlessly waiting for the 15th and 30th of each month. Planning is never part of the equation.

Not too long after, many embark on a different journey.  People get married and have babies, not realizing that starting a family requires solid financial capability.  For many, money becomes a constant source of dispute.  Reality strikes.  The slightly above minimum wage is never enough for everyday expenses.   These couples have now to face recurring expenses of utility bills, rent, groceries and formula milk on a salary that is never enough.  Five years down the road,  expenses  balloon when tuition comes to play.  And the cycle continues because one baby becomes two,  then three….then four…

A few are on the right path.  At a young age, they think of the future. It starts with a dream, propelling them to read and research.  They do not spend everything they earn.  They leave something behind.

Yes, ideally at least 20 percent of one’s income should be stashed away somewhere, whether deposited in the bank, invested in a money-making venture or used to acquire property.

So how does one correct the situation?  It all boils down to planning. Rash decisions should never come to play.  There is no magic formula.  Four words and just four words you must always remember.  Earn more, spend less.  If you are not earning enough then find another source of income that will give you more.  Staying in the same job that can barely feed a family will not change anything.  If your salary is small, look into doing part-time jobs that allow you to work from home during your spare time.  There are many legitimate online jobs that can augment your income. There are greener pastures. You must believe this.  Search for those pastures.  Dream and make it a reality.


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