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I have a friend of mine who will always give me a call around the 15th of every month to the time when he receives his salary and I know he will come across this post.
I hope it will be beneficial to him as well that this time, he may use this month’s salary and not go through the same dilemma.
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I am very sure that it is not him alone, many people face this dilemma especially those that depend only on a single source of monthly income.
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They consume their pay within just 10 days after receiving it and the only hope they remain with is the next payment which is usually 20 days away meaning they have 10 days of plenty and 20 days of scarcity.
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I know this way of doing things has hit many employees during such times when many have lost their jobs. Imagine losing your job with nothing on your account. It is even more painful especially if you have been working for years and have nothing to even take you through 2 months.
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I want to give you some advice. Assuming someone you receive a salary of 1000,000.
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Assuming 1000,000 is the cash that enters your bank account. I trust you have heard of the 20:30:50 rule, if you haven’t, let me give you an insight. If you earn the 1000,000, 20% (200,000) should be saved (not to be touched), 30% (30,0000) should be to cater for your discretionary expenses (school fees, travel, etc.) and the remaining 50% (500,000) is what you consume.
If you give a tithe to your church or mosque, you can adopt 10:15:25:50, you decide whatever works for you and depending on your situation as long as you maintain the discipline.
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With that in mind, you have to ensure that your monthly expenditure falls within the 50% (which is 500,000 for our example) and you can only do this if you are aware of your monthly expenses. Remember, this can only be done if you do some budgeting.
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Write down the list, attach amounts to each item and see if the total falls within 50% of your pay. If your costs are higher than 50% of your income, you have no option but to reduce them and ensure they fit within.
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If you find this hard, you can boost your income by finding a side hustle on the condition that it doesn’t interfere with the contracted hours with your employer.
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What do you do in your free time? Does it add a cent to your pocket? there are lots of hours in the evenings and weekends that you can use to do something which can generate some extra income for you.
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You must gain control over your money or the lack of it will forever control you. –Dave Ramsey.
Now that we are at the end of the month, make it point to spend this month’s salary wisely and use the remaining period of this year to put up something that will help you attain financial independence and get off the salary trap.
Coach Samuel Ibanda
Did you find value in this and would you like to learn more about how to improve your Personal Finance?
WhatsApp me on +256703803255
Email: coachsamuel@samuelibanda.com
