When I was in college, I made a list of things that I would buy when I get my first salary so when I finally graduated I got a good job and was well paid. So I finally received my first paycheck, I felt so happy and I thought to myself probably it is time to “ball” and have all the things that I had always wanted to buy.
So I bought my first car that consumed a lot of gas and that was my first mistake ever. I went shopping in really expensive places and lived a “celebrity lifestyle”. Took pictures and posted them on social media and I got interesting comments with people saying they want to be like me. I am living the life, some of my friends made me take them out and we drank often. Going through those comments, I actually told myself that I am actually living the life “A celeb life with an empty bank account”. No savings, no investments, and no assets. At some point, I even had to borrow money so I could sustain my lifestyle. I learnt a lot when it comes to finances which I am going to share with you.
The first mistake I made was not to come up with a monthly budget plan
A budget helps as a guide to all the financial decisions you will have to be making as per your source of income. When you write a budget plan, it helps you to spend wisely but you need to be able to stick to it. You have to be honest with yourself on how you spend your money and this will help you to properly manage your finances and cut down unwanted expenses.
Track your expenditure records
I did not track my expenses and thus I didn’t realize that I was spending too much. After my experience, I sat down and made a record of my expenses; it made me realize that I had bought a lot of things which I did not need. So I started tracking my expenses which has helped me make better financial decisions and I now have control over my finances.
Live under your budget and not above it
I realized that I had used loans and credit cards to finance my lifestyle, instead of living on what I had earned. The budget tool helped me to stop impulse expenditures and to put aside my salary gratuities to pay for extra items. I got a nice, simple affordable apartment and car; this enabled me to save and invest more.
For many people who are young and carefree, money earned is money spent. I learnt to deprive myself of some things the hard way. I came to the realization that when you spend all you earn, you are only making others rich and bankrupting yourself.
Plan for the future
It is very easy to lavish money when you haven’t set any financial goals. You must build a dream for yourself, whether it is to buy a house, have a comfortable retirement, or just to achieve a savings target. I learnt to focus on future investments, putting my money in acquiring assets (properties that could generate me income) rather than liabilities (expensive cars, houses and lifestyles).
Have multiple streams of income
After borrowing money, I had to come up with a way to pay off my debt and that made me to get a side hustle. Having a side hustle enables you to get extra income for yourself; after all “little drops of water make an ocean”.
My experience taught me no matter how much you earn, if you are not self-disciplined and a good manager, you will still remain broke. Do not conform to peer pressure and how others live their lives; else you will make terrible financial expenditures and decisions.