She did well in her course and is working as a management trainee in a local bank.
Despite the fact that she earns around Sh60,000 a month, her biggest problem is that there is too much month at the end of her money!
What with rent, transport and food to pay for, she hardly has enough left for clothes and entertainment. As a result, she’s constantly borrowing to pay of her debts.
After all, what’s a girl to do? I meet people like Joan all the time. And I often find that with a little counsel, they are able to move out of self-destructive financial habits and learn to manage money well; perhaps even create real wealth.
You see, there are three types of people. There are those who spend significantly more than they earn, those who spend exactly what they earn, and those who spend significantly less than they earn. What many people fail to realise is that they are not just working for today but for the future.
If you are 30 today, you might work another 25 years and retire at 55. But if you live to be 80, you will then have another 25 years of life without a salary.
In other words, every paycheck you earn today should meet expenses not just for the following month but for a post-employment month in the future!
When you live on more than or exactly what you earn, then you are eating your future today.
This is why most people retire from employment only to find they are not able to live the lifestyle they have become accustomed to. Soon, they are depending on their children to help them with their expenses, from hospital bills all the way to transport. No wonder so many fall into depression, get ill or die soon after retirement.
I suspect you might know someone in that situation. That is not where you want to end up.
How do you avoid such a fate?
The most important step is to learn to live beneath your means. Don’t look for a house that fits your status, live in one slightly below!
Don’t buy a car unless you have to.
Don’t shop where all your friends shop. Don’t eat what your friends eat. Don’t have extravagant weddings like everyone else!
Living beneath your means allows you to put aside some savings every month that you can invest for the future.
It’s important to save and invest at least ten per cent of your gross pay.
For those who are married, you could even learn to live on one salary and invest the other! Living beneath your means is a radical thing to do.
But if you want to be like no one else tomorrow, you’ve got to learn to live like no one else today!
Photo: madamenoire.com
The writer is a senior pastor at Mavuno Church.
