In the face of static and even dwindling income for some, combined with the rise in cost of living, especially for citizens of oil producing countries like mine, surviving requires some radical steps. Desperate times requires desperate measures, they say. You cannot live the same way you were living before and not feel the heat. I just want to share a few things we can do to stay ahead in this trying time.
1. Be true to yourself: If you are the type who always wants to keep up with the Joneses, this is the time to let the Joneses live their lives while you live yours. Stop the fake life and be true to yourself. Let people say whatever they want to say, stop trying to impress others with the latest car, phone, fashion or whatever. Be true to yourself. If you are the type that always buy ‘aso-ebi’ for every occasion, this may be time to wear what you have, if you must attend that occasion.
2. Cut down on frivolous or impulse spending: Those days of buying everything you see in traffic are gone. We are in the days of financial discipline. If you don’t discipline yourself financially, you will be disciplined by the hardship of life. Make a budget, weekly or monthly depending on the frequency of your income. Don’t just spend without a plan. Have a short term, medium term and long term financial plan. Stick to your budget and make room for emergencies.
3. Deal with your appetite: It will amaze you how much people spend on fast food and unhealthy junks. It is a daily habit for some. Those little spending everyday have a way of draining your purse. It is like a leaking bottle of water, slowly the water will leak away. Try to cook at home. Reduce your indulgence in fast food to once or twice a month, depending on how frequent you have been with fast food outlets. Take natural fruits instead of some of those carbonated drinks and juices.
4. Avoid Capital Projects for now: As an individual, what you need now is what can supplement your income, not what will tie your income down. So as much as possible, don’t embark on projects that will tie down your money for a long while, rather invest in projects that are self sustainable and that can repay you. This of course depends on your income size, if it is big enough to accommodate both capital and recurrent projects, then you can go for both. But remember job security is at the lowest now, so don’t be too certain of that income.
4. Avoid borrowing by all means: Borrowing will limit your expansion capacity. You will be bogged down with the burden of servicing the loan. Interest rates are even too high now to encourage borrowing. If you must borrow at all, let it be for projects with early returns (not capital projects) and check your cash flow to be sure the income streams from such projects can repay your periodic obligations and still leave enough for the projects and you.
If you try to dance to every music played by everybody, you will never get to play your own music, let alone dance to your own music. So learn to be yourself, especially in this trying period.
We will continue this discussion tomorrow.
God bless us all.
Good morning and have a great week.