It is a common practice that after a long week at work, we take the weekend as a chance to party and spend our money. Youths all over will be spotted flocking the latest joints, ready to 'get down'. The talk on Friday evenings revolves around where the party is at, and which joints are getting lit tonight. Well, all work without play makes Jack a dull boy, but sad case here is that these actions are being taken by people who have no savings, and therefore, no money.
You are only as rich as what you remain with after you have taken care of all your expenses. And you are only as wealthy as the assets you have after taking care of the liabilities. It is sad enough that the youth are spending a lot of money that we don't have on things we don't need, but worse is we are working so hard to get money so we can spend all of it at the coolest joint in town. Money comes in, money goes out.
The result of this is we put ourselves in a situation where we either constantly need to borrow money, or find quick means of making the cash, which may not be legal or safe.
Saving a significant part of what you earn not only gives you financial freedom and independence, but is also a sign of maturity. Living from hand to mouth is what we do when we are spending all that we get.
We make different earnings in a month, and so we cannot have a standard amount that we should all save. However, you could adopt the 50-30-20 format. Fifty is for life expenses, put in food, transport, family,etc. Thirty is for your personal needs, put in a weekend out, lunch with friends, road trip down Lake Naivasha, etc. Then twenty percent is savings. This you do not touch. You can save more, but not less than this percentage of your salary.
Priority here should be on finding a balance between what comes in and what goes out. It is better if the scale is heavier on the income side that expenses side. As young as we are, we should adopt a plan for ourselves, and follow through if we are to achieve our dreams. Financial security is vital to living a stress-free life.
