We love to cover financial advice here as it constitutes a big part of your efforts towards success. There are all sorts of financial advice thrown around by people from all walks of life and some of it is pretty bad advice. Theres also really good advice that is thrown around but it doesn’t seem like.it at face value and that’s the stuff I want to talk about today. Some of this advice is misunderstood because of the plain meaning of the words while some seem counterintuitive but stands up in practice.
Don’t shop/buy when hungry
Elementary you may think it is but it does hold up in practice and isn’t limited to your lunch purchases. You will find that your lunch purchases tend to be a bit poorer when made while hungry but the same applies to grocery shopping. Even in this tight economy the hungry shopper is likely to add a thing or two for immediate consumption and these are rarely good choices. In almost all cases if you wait to have a need for something to make your purchase decision you are more than likely to make a less than ideal purchase.
The power of broke
You make your best financial decisions when you are broke. Dont ask me how a person who managed to go broke in the first place is wiser but it holds up. When you have hit rock bottom you suddenly have the greatest hindsight on finances and if you are willing to be honest with yourself you realise where you went wrong. While it may seem like a pity party there is great power in this moment. Write a letter to yourself in this moment on what you should do with money when you have it. Why a letter? When the money comes it comes with it’s own emotions and you will forget the wisdom of the broke person. Try it.
Just because you can pay for it doesn’t mean you can afford it
This one will get you side eyes faster than anything else. People hate to hear this one but it rings so true. Theres two ways to look at this, firstly for one off payments you may be able to raise the money required however this may drain your resources greatly especially if you have to borrow to do so. Secondly in the case of installment payments and/or ongoing costs of ownership. The easiest way to illustrate this is purchasing a car. While the upfront cost of a motor vehicle is car cost which is pretty much in US dollars whether you buy it locally or import the ongoing costs of vehicle registration, insurance, maintenance, repairs if it is older, cleaning, parking and consumables all add up.
Pay yourself first
Not so much weird financial but it is grossly misunderstood. I will be the first to admit that I thought it meant in your business (mine was a side whistle at the time) you must deduct your salary (pay yourself) first. I wish I could say mine was the worst misunderstanding of this I’ve seen but it’s not. I once saw a piece written in a national publication advising people to pay themself first by spending on what they desired before doing anything else. Now that we know two examples of what it isn’t, the idea is to pay yourself the money to keep. Whether it goes into savings or investment depends on where you stand financially but the principle is to build your financial muscle. Those who have done.so to setup emergency funds will tell you how helpful it is in these uncertain times.
Spend your money where you want to spend your time
This one is new to me but you may have heard it before. In a conversation about how we are surviving lockdown with a friend they offered me their Netflix account to give me content to occupy my time seeing as I didn’t have a Netflix subscription. I then informed them that I already have Audible and Scribd subscriptions for book content which I am much more interested in. Nothing against Netflix of course. That is spending your money where you want to spend your time. And we all have cases where we want to do something but our spending doesn’t match our intention. Perhaps you want to learn to be a copywriter but spend money a DSTv subscription instead of a copywriting course. Again, nothing against DSTv. It really sounds like throwaway advice but it does make a world of difference in your life. Perhaps you want to eat healthy but still spend a lot of money on unhealthy foods. Its applicable to so many things.
Theres a saying that goes “dont believe what I say, investigate it”. When someone, self included, dishes out financial advice to you dont just swallow it whole or throw it away for that matter. Investigate it. Give it a trial run to see if it holds true. Resermarch what others say about it and their experiences. Most of all evaluate its validity for your life