I’m sure you’re wondering why this lady is talking about salaries on a Monday such as this. Let me tell you, it is very expedient o. Ask me why…
This is obviously the last week in the month of February and those of us who are on salaried employment are already waiting to see alerts by the end of the month.
On a funny note, some have already spent all the money before it has even come. This is because they have borrowed and hope to pay back when the salary shows up. I know the feeling this brings; I’m sure you do too.
The only effect this would have on you is that you will wear out, working without anything to show for it; just like a cycle. You won’t want to be caught in this web, right?
In my next post, I’ll be enlightening you on how you cannot survive on your salary alone…watch out for this.
As I was gently noting, many people are lulled into thinking that the bigger your salary, the more it meets your needs. The reverse is the case. You have this notion that it’ll be enough to spend lavishly. Before you know it, you are down to your last Kobo and you still have needs.
What you need to know is how to budget your salary. The word, ‘budgeting’ is an all too familiar one but we are not going to look at it in details.
It’s true that no amount of budgeting will take care of all your needs but there’s a way you can section them out and your major needs would be sorted out.
Let me sound a note of warning!
You can only begin this when you are first accountable to yourself. You are responsible for your choices and actions. Self discipline is your primary method of improving your life when you make the right choices for you.
You have to know the difference between your wants and needs. Needs are necessary for survival, e.g. food, shelter, utilities like electricity, etc. This survival also includes caring for your mental health. Saving and investing money for future use is also seen as a need.
Meanwhile, a want is a desire to get something e.g. a new clothing, vacations, etc. It is not necessary but would be a good thing to have.
You need to set all these in your priority list so that you can track your expenses.
Suggestively, there’s a rule of thumb you can use…
The 50/30/20 rule was made easier to understand by Elizabeth Warren in her book, All Your Worth: The Ultimate Lifetime Money Plan, which says to divide up after-tax income and allocate it to spend: 50% on needs, 30% on wants, and putting away 20% to savings.
Since it is not a hard and fast rule but a guideline of budgeting, you don’t have to use this procedure verbatim. This is because the percentages need to be adjusted based on your personal circumstances.
Allocate your money into percentages based on how you know the shoe pinches you. This is a big consideration because some persons are low income earners. But of course, you have to first enumerate your needs, wants and others on a list and write out how much each one would cost. That way, you would know what to leave for the next budget.
Then you draft a priority list and arrange them according to a scale of preference. This is because sometimes, we really can’t attend to everything at once. Using this method, you tick them off one after another.
I would reiterate that there is no hard and fast rule in budgeting. You can set out whatever percentage you want for your savings and debt payments, leaving the rest to your living expenses. It is entirely up to you. Just know that you need budgeting like you need oxygen.
You need budgeting like you need oxygen
Rachael Obehi
Know this and know peace!
I hope you got value? Please let me know in the comment section. You can also send in your contributions, would be much appreciated.
Thanks
Insightful