By Jagjit Singh, 26th December 2011 @ 11:00, Total Comments: 0, Hits: 1474
In the recent past I wrote one article which was captioned - “Enjoy your Wealth.” There are two distinct ways somebody may interpret or conceive this message, one rightly
and the other one wrongly. Let us first tackle the wrong conception head-on.
The moment somebody hears the caption – ‘enjoy your wealth,’ he/she may get an impression that one has got the licence to spend in order to enjoy life. But the message – “enjoy your wealth” always comes with a caveat to comply the 3S’s i.e. spend less, spend well and spend wisely.
We all know, December is the festive month and New Year is just around the corner, hence it is more important to observe the commandments of the 3S’s. If not then for some irresponsible people we run the risk wherein they, in guise of celebrating the New Year party, may end up spending more than what they respectively can afford individually
and thus would enter into the new year completely broke.
This is where one needs to observe these commandments religiously. Let me now take each component of 3S’s and delve on its importance. The first commandment indicates about ‘spending less,’ which in relative term may differ from one person to another. For someone spending Tzs. 1 Million on new year party may fall under the definition of ‘spend less,’ while for some other person the said amount could be as low as Tzs. 10,000.
Thus depending on one’s disposable income, one can easily determine his/her limit to spend, which ultimately must qualify to be termed as ‘spend less’ for that person. The moment you exceed the specified limit, your so called ‘enjoyment’ will immediately get transformed into your “misery/trouble.”
Remember there is a very thin line between enjoyment and excess of it and we must always remain within the defined boundary and never try to cross the red line. The second commandment necessitates on our part to ensure that whatever we spend, it must be ‘spent well.’ When we say ‘spend well,’ it basically indicates that one must get the value for money, every time you decide to pull money from your wallet.
Thus, before you shell out any penny out of your pocket, pause for a moment to evaluate whether the particular spending is bringing equal value to you or not [in whatever form it may be]. The moment you get a feeling that the spending is not worth its equivalent value, you must withdraw yourself from that transaction immediately. The third and the last equally important component of the 3S’s get us to ‘spend wisely.’
This is where you need to judiciously apply - your experience, knowledge and good judgment. For example, a person who is staying at a remote village where there is no internet connectively and if this person buys a costly blackberry instrument instead of a simple phone which can easily serve his purpose of telephone communication, then such expenditure will be termed as ‘unwise.’
Another example could be when you visit a bar to drink a bottle of beer to chill out and finally end up drinking five bottles of beer. Will anybody say you spent wisely in such a condition? Certainly not! There are three common mistakes people make with regard to spending i.e. (a) spending money on the wrong thing; (b) borrowing money to spend; and (c) spending without control.
Some people believe that it is wise to spend money on things that have a lasting
value. Another common mistake is spending too much on gifts for other people in the false belief that the more you spend, the more you will be appreciated or loved. Frugality
is not for everybody, but smart spenders look for bargains throughout the year and buy a mixture of higher priced good quality items and also the lower priced items.
Spending wisely also means financing your purchases in the most costeffective way. The older generation was unfortunately right; it’s best to pay with your own money than to borrow.
There was a time when rampant inflation led many to believe that it was cheaper to buy now with borrowed money than to save and buy later at a higher price.
But what we are forgetting here is that the cost of borrowing is usually higher than the prevailing inflation rate and thus it does not fit well into the definition of spending wisely.
The best way to get on top of debt and to start saving again is to be very proactive about controlling your money. Take charge of your money rather than letting other people (your creditors) take charge of it.
It is up to you to decide how you are going to allocate your income between saving, debt reduction and spending. By setting up a money management system whereby you direct where your money goes as soon as you receive it, you will always be in charge. Therefore, enjoy the approaching New Year party but for God’s sake please do remember the three commandments i.e. spend less, spend well and spend wisely. If you would follow these commandments then I feel safe to convey my avid readers a very happy and a prosperous New Year 2012.
Cheers to life!!!!!!!!!
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