SPEND YOUR CASH BEFORE YOU SEE IT – Financial planning 101

November 25, 2020
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I have seen people make a lot of money and then blow it all away. I have also seen people who have money but seem frozen in time unable to act mainly because they don’t know what to do with the money. We are a few days from Black Friday, the biggest spending spree of the year, and many, with the good intention to take advantage of the sales – with prices cut by huge margins – will become broke. It’s all more money trouble. What can help? 

There is a rule I have found superbly helpful for many years now. This has helped me to have very little problems with my meager earnings. I spend all my money before I even see it. Chill, it’s not what you think. The rule is this: Don’t spend a dime out of any cash you make unless you have previously decided and WRITTEN DOWN how you wish to spend the money; thus no spending unless it is in your budget. This rule applies to cash that comes regularly like salary, investment earnings and other irregular cash inflow like gifts, in fact, all awoofs (unexpected cash awards).

Spending money without a budget (plan) is self-defeating. It is like making decisions leading to marriage in a relationship where physical intimacy is the most important thing; or when one is high on drugs; or when decisions are made at the height of anger or pleasure and happiness – we even have a saying about ‘promise wey man make on top woman’. E no dey end well. The euphoria will surely becloud one’s thinking, making it impossible to focus on the more important things.

If you left your expenditures to when the money arrived, you’d gleefully forget some important, legacy issues that may have been waiting for resolution forever and be drawn to urgent, immediate, and recent things. Spending that leads to rash, unplanned expenditures that leave you empty and unfulfilled.  At times, the best way to utilize that cash is not to spend it but save it for the future, but how would you know if there’s no concrete plan?

In my culture, in the olden days, a man betrothed a woman in a small ceremony by wearing her a feather. Thus by saying that a woman is wearing a feather, indicated that she’s taken and not available for any other romantic advances. Please put a feather on the head of all the money you are expecting when you are thinking straight and there are no pressures, that way it would not be available for any waste or misuse. Yes, spend even before you see the cash by allocating funds to things you wish even before the cash comes in; so that when the money drops you simply disburse – it’s already been spent, no confusion about what to do with it.

How do you make a budget? Ask yourself, If I have money now what will I do with it? Calm down, no rush, I know you are saying ‘it depends on how much I get’. Imagine you have a very huge sum and now begin to spend – allocate all the funds:

  • List all your basic needs, current and immediate. Food, clothing, housing, transport, etc. At every time you should know how much you need to survive in a month and up to a year and ensure that nothing else takes that cash.
  • List all your due obligations, payments, debts, etc and ‘spend’ on them. 
  • Then, think about all the things you need or wish for to make your life better in your current situation, for example do you need more clothes, to improve your house with better fixtures. Are there people you wish to support? You may start small with everything that is lacking in your life now.
  • Then if you have a strategic plan for the future – and you should! You may now bring into your budget all the things you think will make your life truly beautiful. That mansion you dream about? Bring it on. That supercar? Don’t leave it out.
  • So if the cash you are spending is not enough to immediately buy all these things, you may decide to take care of all or some of # 1 above only and begin to save for others.

The strategy listed above has proved helpful to me and my wife. For regular income we have a fixed list for expenditures that is reviewed periodically. We have an ongoing list of things that we would like to do if we have money including people that we wish to assist financially. Then we have a list of practically everything we wish to do, which we update regularly as we sense a need or we decide to delete or add an upgrade. If you gave us millions of dollars today, we will spend it all on the items already on our list ONLY! Just try us. lol

Don’t think it is only ‘serious’ things that are in there. An amount for outings & merriment is there, clothing needs are identified & entered. Big-ticket items like holidays, home improvements, investments, are of course there too. Everything I spend money on is in there. I also have a small amount for emerging issues in the budget. So you see, I spend all my money before I smell it and that has been one of my factors of success.

Do you think you can adopt or adapt this in your financial planning, it might seem burdensome initially but when you get a hang of it you would see that it is liberating & nothing helps you draw closer to your spouse if the things on that list are the outcome of a meeting of 2 minds.

So in summary, spend all your money before it comes – Allocate all the money into what it would accomplish for you. All of it! Decide what you will save, the amount you will use to meet immediate needs like rent, food, housing, education, etc. Allocate funds for current life improvements as well as for long term growth. Decide what to do with your money before it comes and you will see how easy it is to manage money and gain the joy of purposeful accomplishment.

Postscript: There is another advantage of this sort of planning, in a wonderful miraculous way you will shortly see the things on your list appear in your life. In 2004, my wife and I had a ‘make a wish session’ where we wrote out 5 things each that we wanted. We then ranked these wishes in order of priority & urgency & got to work. Some of the things on our list we could accomplish soon enough, others took years but in all, we were never in doubt where we were going & what to do, in clear terms, with the cash we made and would make.

When we made those wishes, we were as broke as can be. But we believed in our potentials and we spent the cash before we saw it. We still do.

#WeliKrus #LessonsLifeTaughtMe #IgniteYourLife #SharedProsperity #YouShouldStartNow

Image by Kelly Sikkema

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