, , , ,

FINANCIAL PLANNING AND FAMILY STABILITY

Financial planning is the key to wealth creation and financial fitness

CONFRONTING RUNAWAY EXPENDITURE AMONG SALARIED WORKERS

‘You can never be a millionaire working for someone, ‘ so goes a  popular cliché. Although the implied meaning is inaccurate, the wisdom behind that statement resonates with a select class of citizens commonly referred to as the working class. This is a class of hardworking and mostly well-educated middle-income workers, mostly city dwellers with urbane longings and fast life aspirations. 

yOUNG INEXPERINCED COUPLES ARE AT A HIGH RISK OF IMPULSE EXPENDITURE

it is advisable that young couples begin planning their finances at the onset of their union.

As a financial advisor, I have encountered many young men and women, usually aged between 25 and 35 years, who after more than five years’ employment in lucrative positions, have zero balance in their bank accounts. 

These are not isolated incidents identified among outlier spendthrifts. A majority of the employed, I have noted, suffer a similar fate. I have identified 3 fundamental causes that underlie every form of financial ineptitude prevalent among our working population.

  1. Absence of deliberate long-term thinking in goal setting, financial planning, and spending habits.
  2. Expensive spending habits especially on basic needs such as education, shelter, food, and entertainment, coupled with high dependence on the unemployed.
  3. Minimal investment in crucial financial tools such as insurance,   bonds, stocks, and real estate, and instead resources are wasted on purchases that depreciate such as cars, electronics, and fashion accessories together with the ostentatious display of apparent affluence such as weddings, holidays and parties.

 

The above factors often blend and when encouraged by easily accessible lending services from banks, a cycle of borrowing to spend soon emerges.

A discussion with a financial advisor helps one understand the state of their finances.

A discussion with a financial advisor helps one understand the state of their finances.

This happens when, after a young couple for instance has spent their combined salary on a lifestyle they can ill afford, are forced to seek a salary advance from their local banks. 

They borrow to sustain a lifestyle of consumption without saving or investment. Their children often attend expensive private schools while they reside in exclusive neighborhoods that charge a premium for rent. Many are servicing a loan they took to fund a recent lavish holiday at the coast and still have to maintain and service a fuel-guzzling SUV. 

A young person in similar circumstances makes a vow to manage his finances, but he never gets around to sorting his debts and cutting down his expenses. 

So the cycle of borrowing and indebtedness persists. 

If God forbid, a misfortune such as sudden illness or company layoffs befalls this couple or the young person, they are surely a week or two away from destitution.

One aspect that could mitigate the financial catastrophe in waiting is an immediate injunction on spending, a deliberate plan to pay debts, and a drastic restructuring of their lifestyles. 

Sadly though, without sound financial literacy, this is unlikely to occur.  A whole generation of productive men and women face a potential financial disaster if urgent and crosscutting measures are not taken.

Thousands of our middle-class families have visited my website seeking guidance. I recommended them to Financially Fit Africa, a wealth education company for practical financial well-being training. 

Among those who signed up for financial literacy training at FinanciallyFit, over 80% reversed their fortunes and are now living comfortably in less affluent circumstances. 

Careful budgeting aids in cost cutting measures

Careful budgeting aids in cost-cutting measures

The uplifting factor is that the majority have cleared their previously insurmountable debts and are currently exploring saving and investment avenues to acquire financial freedom within five years.  

To cap it, my single advice towards those attempting to acquire and accumulate wealth is this: decide what you want to have or be and think long term, then audit your current financial health, and start by drawing a plan to pay off all your debts. Finally,  learn how to utilize various financial instruments to save, invest and secure yourself against sudden misfortune. For detailed information about this plan, visit www.financiallyfit.com.

 

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published.