Setting Your Financial Priorities Aright

A few weeks back, a friend of mind shared with me a story of a renowned footballer in the country who made so much money during his active years. However, years after he retired from his football career, he was declared bankrupt and broke and the worse part of it is that he is now soliciting to the government and other concerned citizens for support to pay his bills. Now, one may ask, what happened to all the money he made during his active years? It was also revealed that he has zero investment to fall back on and now he is back to square-one. Almost all of them were spent on over-inflated spendings. You see why one has to prioritise their spendings.

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There are some tips we will consider on how to set your financial priorities aright for the sake of the future.

1. Invest Before Spending

Some people do not deem it fit to invest as they earn and if anything happens to their only source of income, they will be affected negatively. As a matter of fact, if your entire financial inflow comes from just one source, you are already running at a risk. There is a need for financial diversification. That is, having more than one, or multiple, streams of income.

During the pandemic of last year, a friend of mine made a very eye-opening revelation. He told me that about 3 of his businesses was halted by the lockdown of the the pandemic. If those were his only sources of income, he would have been frustrated financially. He was able to survive through because he had other streams of income. Learn not to eat everything (money-wise) that comes to you. Try to set a percentage apart for Investment. You can also decide to be investing in crypto but do not forget to do research about it.

The truth it, the investment you make today may be what will save you in a later year, so do not joke with Investment. Remember that a farmer who does not set aside some fruits to sow as seeds will have nothing to harvest in the future.

2. Saving For Contingencies

Again, when you receive your income, it will be unwise to spend everything that comes. You should be able to keep apart something to save for some unforseen contingencies. Sometimes, challenges may not give you prior notice before they arrive and at that time, the help you render to yourself may be the only help available. The truth is, you are absolutely responsible for the issues of your finances, so do not consume your tomorrow today.

Someone that does not know how to save is already at a financial risk. No matter how much money you earn as salary, if you do not save, you will find out that before the month ends, you will be left with practically nothing. You do not have to buy anything you fee like, you should have the discipline to save.

3. Spending On Necessities

Another area you need to prioritise is how you spend. If you cannot afford something comfortably today, you should not allow it to put you under financial strain in order to afford it at all cost. Not travelling with first-class when your friend does that should not make you to feel like a failure. Moreover, both you and your friend will still arrive the same time at the destination.

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Do not go beyond your financial capacity to buy what you know you cannot afford. Some people even go as far as borrowing from people to buy something just to show off or to feel belonged. This will become a bane to them in a later times. One advice I normally give people with regards to spending is:

Live within your means.

Thanks for reading