Hello there, fellow penny-pinchers and budget-breakers! Today, I have a tale for you. Aping many imminent scholars, I (a wannabe scholar) often find myself having enlightening conversations with the Rickshaw drivers about the state of the economy. This time I eavesdropped, on a conversation between a Rickshaw driver and his wife. And let me tell you, it was not about the economy.
As I sat in the back of the rickshaw, listening in on their conversation, I couldn’t help but chuckle. The driver was adamant about buying a new smartphone through the Amazon Great Indian Sale, while his wife was trying to dissuade him. Why you may ask? Well, the school fees for their children needed to be paid. Ah, the eternal struggle between wants and needs.
But the amusement didn’t end there. As fate would have it, I reached my friend’s birthday party, only to find out that her husband had gifted her the latest version of her old phone – a ritual, she said. And here I was, using a three-year-old phone that was working just fine. Talk about first-world problems!
But that got me thinking, how much is too much when it comes to spending money? It’s like money has a mind of its own, always finding new and creative ways to escape our wallets. It’s like trying to hold onto a slippery bar of soap in the shower – the harder you try, the more it slips away. Maybe we need to start treating our money like our significant other – set some boundaries, communicate our needs, and make sure it’s not slipping away from us at every opportunity.
Making money is an exciting and challenging experience, but it’s equally important to know how to handle it wisely. Not knowing where to stop can quickly lead to financial instability, so it’s crucial to understand the importance of managing your finances and finding ways to stop excessive spending. But how?
1. Budgets:
The most important aspect of controlling your spending is to have a budget. A budget is a plan that outlines how you intend to spend your money and helps you stay on track with your financial goals. A budget will allow you to see exactly how much money you’re spending in each category and help you prioritize your spending. Take a look at your income & expenses & identify areas where you can cut back. This does not mean lowering your standard of living but buying a new phone every year, well that’s completely avoidable.
2. Prioritise spending:
Prioritising expenses is the key. This includes knowing exactly how much you make, what your expenses are, and how much you’re able to save. By keeping track of your finances, you’ll be able to identify any areas where you may be overspending and make changes accordingly.
3. Curb that impulse:
It’s also important to avoid impulse buying and to think twice before making a purchase. Ask yourself if you really need the item, or if it’s just a temporary desire. Impulse buying often leads to overspending, so it’s important to be mindful and make decisions based on what’s best for your financial stability.
4. Is lifestyle inflation adding value to your life?
Another important step is to avoid lifestyle inflation. Just because you earn more money doesn’t mean you have to upgrade your lifestyle. It’s okay to treat yourself occasionally, but don’t let your spending increase at the same rate as your income. Increased income should go towards the creation of a strong financial foundation.
5. Think futuristic:
It’s also important to have a long-term financial plan. This might involve saving for retirement, paying off debt, or saving for a down payment on a home. When you have clear goals in mind, it’s easier to make informed decisions about your spending.
6. Level up your cash game:
Easier said than done. But finding ways to increase your income can also help you control your spending. This could mean finding a higher-paying job, starting a side hustle, or finding ways to monetize your hobbies or skills. By having more money coming in, you’ll be able to put more money towards your financial goals, such as paying off debt or saving for the future. In India, we have a special term for this phenomenon – “paisa vasool” It means getting your money’s worth, but let’s be honest, we often end up spending more than we should just to get that extra masala on our vada pav. It’s like we have an internal urge to spend more every time we see our bank balance increase. But as the wise old aunties say, “money doesn’t grow on trees, beta!” So, it’s important to set financial goals and priorities and resist the temptation to splurge on
unnecessary things (even if they are on sale).