The economists say, Human wants are insatiable. This true for all humans. There is no time an individual is completely satisfied with what he or she has. The long to have more and more is always there. For some individuals whether they are financially dependent or not, they go for whatever their soul longs for. Because of this singular reason, they cannot manage money effectively. At some point they always go cashless because of their constant desire for things.
There are measures that can be taken to effectively manage money. It doesn't have to do with whether one lives in affluence or penury. Money needs to be managed so that it does not get exhausted in a way that will be detrimental to to its owner. As humans, the way we spend money is very important to how long the money lasts in our accounts. People do say that it is people that study economics that are economical in spending. Yes, if you have met anyone that studied economics, you will know how economical they are. This is actually an attribute we all are supposed to possess. There is nothing wrong being economical when it comes to what you do with money. It all depends on how each individual goes about it
I wish to share with you some of the strategies that can help you manage the wealth you have acquired. Below, I will list and explain them.
- Do a Scale of Preference for your needs.
- Do opportunity cost for your needs.
- Have a budget.
- Cook 70% of the food you consume.
Let me explain one after the other.
Do a Scale of Preference for your needs.
A Scale of Peference is a list of items in order of importance. This is one way an individual can manage money. Sometimes, the needs arising for an individual may be very many because there are some wants in between. While the needs are important and inevitable for existence, the wants can be forgone. Listing this items in there order of importance is necessary to be able to meet the most important needs. This will help to cut cost and judiciously use the money available at every point in time.
Do opportunity cost for your needs.
Opportunity cost is the forgo of some of an individual's need in order to meet the most pressing and important ones. This can be done from the scale of preference. Because of the complexity of human needs, an individual has to forgo some needs in order to be able to meet some. The opportunity cost should be centered around wants and not needs that are basic necessities. Needs are basic requirements for human survival such as food, shelter which can be satisfied. While wants are more like humans craving which are not for survival which cannot be satisfied because the more they are gotten, the more they are wanted.
Have a Budget
Planing money around a budget is one of the best things to do in managing money. Budgeting is the process of price allocation to a list of needs. This should follow after an opportunity cost have been done. Except for an unexpected increase in price of any of the items, the budget should be followed in the purchase of items in the market and on no account should an individual add another item to the budget that has been made. Budgeting is not about the price alone. It entails the items and the price that has been put in the list. An individual does not have control over the price because market situations may change but there is a total control over the item. Let items in the budget be fixed and avoid adding any other item.
Cook 70% of the food you consume.
One of the very thing that exhaust money quickly is eating outside, eating junks. An individual who can avoid this to some extent can save a fortune. Except for fruits that may be bought outside, one should endeavour to cook the meals one consumes. Not only does eating outside consume money, it also endanger one's health. An individual can get heal from a meal prepared in a dirty environment and be poisoned. He ends up in the hospital to spend money on treatment and medication. It cost more to eat outside than to prepare meals by oneself.
Conclusively, the effective strategies in managing money are all economic strategies. We just have to be economical in order to manage whatever money we have gotten through hard work or wisdom. Generally, management culture needs to be imbibed and applied in order to avoid being stranded financially at any point so as to enjoy the the little/much in our hands.
Thank you #leofinance and everyone for the support. It is very much appreciated.