09:31 am - Thursday 20 September 2018

Dont ignore daily expenses

By Amalawi - Wed Apr 03, 10:20 am

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By Vutumbiko Sibanda

Mzuzu, Malawi: I will start this article by saying taht may the days of BONYA fade away soon!

In simple terms, an expense or expenditure is an outflow of money to another person or group, towards paying for an item or service. In our day-to-day life we often incur various expenses in order to attain a goal or to accomplish a specified purpose

Also it goes without saying that with every single expense that one incurs, it reduces one’s purchasing power, consequently one would be left with a less money to spend or to accumulate as savings. There are two ways we can boost our savings or call it ‘disposable income’

First and traditionally the most practiced one – is by enhancing our income. I agree, this is one of the most progressive approaches and one must adopt it in order to go up the ladder in every pursuits of life, whether in business or employment

Although there are many legitimate ways through which one’s income can be enhanced, however often it is observed that we end-up attaching too much importance to this element of enhancing income while ignoring other important elements

Moreover with the after effect of ‘Malawi economy Crisis’ and recovery being slow, it has now become more difficult to sustain the current levels of income rather than enhancing it. This is applicable not only to business entities but even to ordinary human beings.

 

Expenses are on the rise

Expenses are on the rise

Worldwide people across the board lost employment while for certain other fortunate employees there was a reduction in salary ranging from 5 to 50%. I call this category as fortunate because they are relatively better-off than the first ones who lost their jobs out rightly.

Containment of expenses

This is where I introduce the second and equally important element to boost one’s disposal income and that is by ‘containment of expenses’. It is a powerful tool and if applied judiciously can easily make someone to sail through a difficult phase of life financially

However let me clarify that ‘containment of expenses’ is needed to be practiced not only in trying times but even when things are hunky-dory. Majority of people make the mistake of ignoring the importance of ‘expense containment’ when the going is good and they are the ones who suffer the most when things change adversely

This is because all of a sudden one cannot change gears from an affluent lifestyle to a frugal one. Often, being frugal doesn’t mean doing without. It just means buying things you normally buy more efficiently.

 

Identify those expenses which you can do away with, and that to without compromising much on your usual life style as practiced. Findings of numerous studies on human behaviour indicate that majority of employed people tend to spend most during the week which immediately follows their monthly salary disbursement day

This is the time they tend to become ignorant about the ‘containment of expenses’ and end-up spending the maximum. During this short phase, their ‘impulse to spend’ is on the higher scale and as a result overpowers their other attribute i.e. ‘resistance to spend’, which takes a back seat

On the other hand, the same categories of people behave quite conversely when money in hand becomes scarce and the monthly salary day is still far-off. Therefore ‘expenses’ should be looked upon as an integral part of the income, as it has a direct relevance on the creation of one’s savings or enhancement of disposal income

The person who practices ‘containment of expenses’ diligently would always enjoy a higher level of disposal income than others in his peer group. There are many instances when we tend to spend just for the sake of spending.

 

It is your right to demand the ‘value for money’, hence control your impulses, assure yourself of the necessities and then only take the money out of your purse. The small sacrifice which you are making today will go a long way in making your coming days more reassuring in today’s world, full of uncertainties. Finally I conclude this topic with a famous quote stating:

 

“Those who attend to small expenses are always rich”. So every expense howsoever small it may be needs attention, as every penny you spend is a dent on the creation of your ultimate saving and rightfully so on your disposable income as well

 

May the days of BONYA fade away soon

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