Last Christmas was amazing for Vince, as he’s fondly called by his friends & many of his colleagues. Vince works for a multinational telecom as senior HR executive; he’s responsible for all hires especially the top notch ones. He earns well, lives well and looks every inch a successful executive but something always seems missing when it came to his finances.
Last Christmas, he went on a spending spree; changed virtually everything in his house because of a huge bonus he earned. They even had an elaborate Christmas party for family & friends, and not that it was anyone’s birthday. Vince had a habit of spending all his monthly income before his next paycheck. It always throws him off balance.
Few weeks into the New Year when schools resumed, he was all over the place looking for school fees for his children. Of course, he eventually paid the school fees but not without much struggle, drama & borrowing.
A number of professionals are like Vince. They earn well, live beyond their means & complain that the salary is not enough. The truth is, the salary will never be enough. One has to learn to live within his/her earning & yet save a percentage of it.
Earning a volume of money as a salary does not necessarily translate to wealth or better still financial freedom. The volume of money earned is one thing, but the size of money retained in savings is a different thing altogether.
Many executives earn very well but live beyond their means and are always stressed financially. They live in houses they can’t afford & send their kids to very expensive schools just to keep up with the proverbial ‘Jones’. They struggle to keep a handle on their bills, spend as they earn, living from one paycheck to another.
It’s no crime to want all these good things but you should earn it first before you spend it, not the other way round. If you earn #350,000 monthly and you can’t save at least 10% monthly, you won’t save even if you earn #2 Million monthly. We often forget the teachings of Proverbs: The wise store up wealth & luxury for themselves, but fools spend whatever they get.
Not all who earn millions monthly from salaries & other income are financially okay; many hardly save 10%. Savings is a deliberate attempt to set aside certain amount of money periodically or even a percentage. You can have target savings towards a particular project or just make it a duty to religiously save a percentage of your income. Have a dedicated account for your savings. Give standing instructions that a fixed amount be moved to it, monthly.
Finally the book of Proverbs advises: “The plans of the diligent lead to profit as surely as haste leads to poverty”. Begin your savings plan now