Let me begin by asking you a question; and I want you to be brutally honest in your answer. Have you ever had a significant sum of money in your hands that you thought would last some time or would help you to solve certain problems, only to ask yourself at the end of the day what you really did with the money, especially when the original goal remains unattained?
Financial discipline is one of the most difficult personal disciplines to develop. It is one of the key areas where I focus the attention of my proteges in their mentoring sessions with me. No matter how much you have in your account, if it is not properly managed, it will ultimately be frittered away. Money was created to be a messenger, a denomination of value that is exchanged as a reward system for value created. Money and value are Siamese twins. It is always flowing in the direction of those who are creating value in the form of solution codes. The more solutions you create and connect with people, the higher your potential for getting money. When it comes to the hands of a man who didn’t have a purpose and a corresponding value in mind before it came in, no amount is too big to fritter away. When money does not find specific errands waiting before it comes, it has an uncanny way of creating its own errands, no matter how insignificant or irrelevant they are. This is why the Bible says that as riches increase, so do the mouths that feed on it. Money that is not ploughed intentionally into the service of a greater purpose will ultimately be spent accumulating liabilities.
Statistics show that over one-third of sweepstakes lottery winners declare bankruptcy between three to five years afterwards due to lack of financial management principles. Yet, their reason for playing the lottery was to use a stroke of fortune to exit the grip of poverty! People seek higher-paying jobs or promotions because they believe that the extra income would boost their economic power. Three months into the new job or position, they begin to desire more! Statistics also show that if care is not taken, the more money a person makes, the higher their propensity for greed and crass consumerism, which could ultimately end in more debt. Indulged children who are not taught financial discipline and the value of money will grow up as entitled consumers who, even if they inherit a fortune, will still end up broke. The story of the prodigal son in Luke 15 of the Bible is instructive here.
All over the world, financial challenges continue to mount because of many factors. Unsteady markets, job insecurity, a highly nomadic workforce, inadequacy of pension programs even where they exist, rising cost of living, political, economic and social instability, growing emphasis on individuality rather than community, are some of the factors that should challenge the individual to make intelligent financial choices. With the array of products on offer in the marketplace, and each one trying so hard to make us believe that we cannot do without it, the need for financial prudence becomes even more essential.
Whether in personal life or in the corporate environment, resourcefulness is fundamental to sustainable success. Resourcefulness is the ability to manage resources to accomplish required goals which the resources alone at face value would not have been able to accomplish. A resourceful manager will grow resources and the one who only focuses on the limits of resources will always waste even what is made available.
Guided by the principle of delayed gratification and the conviction that resources must be deployed according to a compelling “ikigai” (life essence) the Japanese have for long been known to have one of the highest saving rates in the world. The disciplines of Harachi Bu (stop eating when you are 80% full), and the simple and minimalist propensity of Wabi Sabi also makes it easy to prioritize frugal living, spending money only on essentials.
Enter “kakeibo”, the Japanese value of managing personal finances, a principle that is applicable to the workplace as well. If a person can successfully manage his own funds, he has no problem managing collective resources. All over the world, most conflicts emerge around the management of collective resources.
Kakeibo means “household financial ledger”. The concept was coined by Japan’s first female journalist Hani Motoko in 1904. The idea is to keep a journal of all your financial inflows and outflows over a given period so that you can track how you have spent money in that period and how much was spent on unnecessary things. This helps you to think about WHY you are making each of your purchases. It is not meant to condemn, but to help you focus and align your expenditure with your loftiest goals. Consequently, you can become more mindful and prioritize your spending to reflect a flow in the direction of the key things of your life.
To do this effectively, set out a monthly budget and document your projected income for the month as well as your fixed spending for the month. In addition, set a savings target that stipulates the percentage of your income that you can save. The real discipline is in documenting your daily expenditure in a journal. You may start by dividing your expenditure into some key headings. First are the fixed essentials that you cannot do without, like your house rent or mortgage, food, transportation, utility bills, subscriptions, and the defraying of any debt that you may owe, as well as contributions to your church or favorite charity. Second, you may include social expenditure. This would include the money spent on eating out, cinema outings, hobbies and maybe new clothes. In the third category, you can have incidentals. This would entail expenditure on community contributions, club memberships, unexpected repairs, unexpected gifts or other emergencies you could not have anticipated. If you grew up as a baby boomer like me, you are probably familiar with the envelope system of budgeting where you labelled envelopes according to expenditure categories and allocated money to each one while you discipline yourself to see that the money in any envelope is spent only on the item documented on the envelope.
Let me warn you that this is not an easy task. But it is doable. Technology today has even made this easier by the creation of various apps that can facilitate your efforts in this regard. Properly done, you will not only get a good picture of HOW you spend but WHY you spend. Do a review at the end of each month to track your progress and see if you have kept faith with your original goals. If you have not, don’t condemn yourself. Simply make amends by asking yourself how much money you have, what your savings target is, how much you are spending, and what you need to do less of by minimizing or eliminating the flow of resources towards it. No matter how small we think our income is, we can always save something from it if we apply the necessary disciplines… continued
Remember, the sky is not your limit, God is!
ALSO READ: Gunmen Attack Anambra Council Secretariat, burn six vehicles
