SPENDING SYSTEMS Cont'd...
Now John works for a cybercafe that pays him 10K a month. All he does is apply the percentages to each allocation. So as far as John is concerned, his disposable income is N3,000 (30% living allowance allocation) plus N750 (7.5% spending money). His mind does not stray to money earmarked for other purposes.
In his mind, his income (what reaches his pocket) is N3,750 and he plans his life with this (cutting his coat according to his cloth, not his size).
Now he gets a job with a bank and his income jumps to 100K. John's spending system is intact. His living expenses allocation now jumps to 30K and he can now spend/entertain with 7.5K. If he changes school for his children to reflect his new status, what guides which school he send his children is the sustainability of school fees payment based on hus budget allocation.
John changes job again, this time to an oil company, and his salary jumps to N1M. Same process. His wife gets the better part of the 300K living expenses, or they may decide to review their formular, and reduce allocation to living expenses and bills. Same for school fees and entertainment
Now take the case of Alex, a quintessential fine fine bobo. A man of the people. His spending system looks like this;
SALARY
=======
Tithe - 10%
Living Expenses - 50+ %
Bills - 30%
Giving - 10%
Spending/Entertainment - 30+%
SALARY INCREASE/BONUS/WINDFALL ETC
==================================
Tithe - 10%
Spending - 80 %
Giving - 10%
From the above, Alex Alex has no cap for living expenses and spending. He spends as the situation demands. He spends typically 120% of his salary, and has to borrow at least 20% each month to make up, either from the bank or cooperative society or colleagues.
When a bonus comes his way, he ticks things off his wish list, newer model automobile, plasma TV, sound station, exotic holiday etc. He is also quite generous. He gives based on feelings, not budget. He is quite a likeable guy, and if he is not married, his girlfriend is the hottest chic in campus.
Now, from cybercafe all the way to an oil well, Alex will be broke as broke. The funny thing is that Alex always believes that the next pay rise will fix his cash flow shortfall, but whenever that happens, his expenses go up to catch up. Since his spending system needs 120% of his income to run, there is no way his salary can catch up. The only way Alex can break even is to reconfigure his spending system.
These two cases above are oversimplified to make a point. Life is not that straightforward.
However, if you are wondering where your money went, and why you have nothing to show after ten years of hard labour, take a second look at your spending system. If you can crack the code, you will find the answers, and henceforth take a firmer control of your financial destiny.
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