Who took my Money?
People always think that big paycheck can solve financial problem. For me, it’s partly true. The most important part before thinking and dreaming a big paycheck is to plan your expenditure.
Do you know that our expenses can be categorized into 3 parts?
- Necessity
- It’s Good to Have
- You Don’t Die if You don’t Buy it
Firstly, let us look into Necessity expenditure. It is an expense that you MUST pay for it. If you don’t do it, you can lose yourself and your family. For example house mortgage payment, foods, diapers for your baby, water and electricity (utilities bill - but not ASTRO please!), charity & donation, your children school’s fees, insurance and others.
Next, It’s Good to Have expenditure. For most of people, a handphone’s bill. Books & Magazine. Annual Family vacation. Your first car that is used to go to office and for your family arrangement. Broadband connection for your home and others.
The the last and the most important category to be discussed, You Don’t Die if You don’t Buy it! It is expenses for your paid television channel - ASTRO, your second or third car, teh-tarik and roti canai at Mamak Bistro with you friends every day after work, new dresses and accessories just to follow the latest fashion on earth (which was actually also a new fashion in 1970s!) and all things that you buy and dream to have it for just for fun. And you will still alive healthily on earth even if you fail to have it.
However, different people have different needs. For me, handphone bills and broadband connection are necessity because I can’t make money without both of it. I’ve once “lost” around $5,000 - $10,000 just because I don’t pay my handphone bills earlier. Sigh. A very hard lesson for me though.
For now, just think about it seriously. Categorize your expenditure into 3 parts. Next post, you will learn how by doing these simple steps, you can reduce your debt headache, credit card burden and end-of-month financial cries, just by doing this.
Now, we will discuss more on You Don’t Die if You don’t Buy it! category and how to boost up your financial position in no time. You should refer to the previous post here.
Look at your expenses in this category. How many percentage from your total income is used to pay for all these things? Did you buy all those by using credit cards and debt?
Okay folks, just cut off all the expenses there and wow! How much can you save per month? Next, forget all those things for next months because remember You Don’t Die if You don’t Buy it.
Do you think that you will lose all your life by forgetting all these latest fashion design, a hot and creamy cappuccino, all the latest technology gadgets, the newest mp3 player, the most sophisticated handphone, stylish haircut.. mm… mmm… what no more metrosexual?
Well, it is your choice actually. Either you want to make delay gratification or not. Me too have a desire to have the most luxurious thing on the planet, but I’ll make sure that my private jet one day is covered by my passive income and not my active income i.e my paychek every month.
And how to build a passive income? One of the answer is you must ready to make little sacrifice today known as delay gratification.
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