The Value Of Having A Money Plan For Emergencies
In Nigeria, people frequently blame the decline in their income and savings on factors like the recession or inflation without even considering their marginal propensities to save or consume.
This implies that individuals don't realize or realize that their financial status has changed for the better or worse, thus when they have money, things seem cheap to them, and when they don't, things seem very costly.
You know, when one's financial situation changes, it gives the impression that something is out of reach when all that was required was discipline.
When individuals are wealthy, they neglect to monitor their spending and don't believe it is vital to do so, forgetting that in order to maintain their standard of life, they must always make more money than they spend.
But how many people continue to make the same amount of money or more as they age? Nobody.
This is why individuals become aware of how wasteful they have been as soon as they are unable to earn in the same manner yet their spending does not alter despite a bad shift in their financial circumstances. Many folks do not lead any kind of lifestyle.
Others find it challenging to maintain a degree of stability in their finances even when their income experiences a decline because they lack financial objectives; instead, their financial status defines their goals.
Due to the fact that although money itself provides the quality of purchasing power, we are ultimately responsible for giving it worth, we must normalize the act of planning and a way of life regardless of our financial situation.
Finding a medium ground will make it simpler for individuals to maintain their quality of life when there is a continual check to their excesses. This is not to imply that people shouldn't enhance or lower their standard of living when there is money or when there is no money.
When we let our riches dominate us, it becomes typical for us to become bankrupt with only a small change in our income. Abundance gives one a sense of endlessness.
When spending money, we must recognize that reality has a greater influence on our decisions than our sense of readiness or perfection. This limits our optimism to some extent and checks it.
In other words, a lot of individuals don't have backup plans, particularly if they believe their original intentions are too brilliant to fail. A person who sells all they own, for instance, in order to pay for a visa to another nation, is placing perfection in their goals.
Let's take into account the possibility that this individual may settle down, earn money, and not even need to return to their home nation; if this is conceivable, why isn't it also conceivable for them to be deported?
Because they believe their first intentions are too brilliant to fail, people frequently go from being impoverished to affluent quickly.
Many people are no longer as wealthy as they once were. Maybe because their financial flow will inevitably shift. But it's because of the backup plans they set up when everything was going well that they aren't back to square one.
Life is unpredictable, therefore we need to have backup plans in place, especially because we can't manage our blind spots, peek into the future, or accurately forecast tomorrow by looking at today.
Although we can't see people's volatility, it is evident in the investments we make and how we respond to changes in our financial situation.
One of the ways to avoid being caught off guard is to hold ourselves accountable, develop a lifestyle that is hardly impacted by a significant shift in income, and have several backup plans.
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@kouba01