Rabu, 26 Disember 2012

Sesi 6 - AKPK

Bismillahir Rahmanir Rahim
Assalammualaikum Warahmatullahi Wabarakatuh
dan Selamat Sejahtera,
Come back!

Live within your means


Remember that your budget is based on your income and expenses.  As each person's income and expenses differ, your budget should be based on your needs and wants.

How do you then differentiate between a need and a want?

A need is something you must have, that you cannot do without.  While a want is something you would like to have, which is not absolutely necessary.

Some examples of needs and wants are as follows:

-         Fine dining
-         Resort-like bungalow
-         Branded clothes
Quality time with family
-         Overseas vacations
-         Luxury / Sports car
Mobile Phone
-         Advanced full-featured phone
-         Advanced full-featured computer

As time evolves, your basic needs may extend to more than just food, shelter and clothing.  Your want today, may become a need tomorrow.

Take this examples.  An individual 20 years ago did not view mobile phones as a need.  Conversely, in today's modern world, a mobile phone is considered a necessity which makes it a need instead of a want.  However, when you choose a mobile phone that is expensive and has all the latest features, you are shifting this need into a want.

The decision you make with regard to what you need or want will directly affect your spending.

Delayed gratification means delaying your wants to a later period instead of having it now.  Whenever you intend to make a purchase, especially when it is a want item, take time to think whether it is within your budget.

Ask yourself these questions before you spend:
  • Instead of buying a car, why not use public transportation?
  • If you really need a car, can you consider getting a second-hand one?
  • If you need a mobile phone or a computer, will a basic model serve your purpose?
  • If you want branded clothing, can you substitute for reasonably priced and good quality clothing instead?
A  budget needs to be realistic and tailored to meet your earning capacity and spending needs.  Living on a budget does not mean sacrificing all your luxuries.  It simply means that you will have to plan and at times change your perceptions and spending habits.
Spending wisely
A key to a successful budget is to spend less than what you earn.  When you have the urge to buy something, pause and ask yourself the following questions:
  • Can I afford to buy it?
  • Do I really need it?
  • Is there something cheaper?
  • Can I delay buying it?
On Spending Wisely
  • Plan your purchases to avoid making multiple trips to the stores.
  • Optimize the use of your resources, including fuel and time.
  • Avoid getting caught in last minute shopping frenzy.
  • Stock up household items in advance to avoid festive rush.
  • Always have a shopping list to avoid unnecessary buying.
  • Avoid buying things you do not need.
  • Always keep to your budget. 
  • Compare prices at various outlets before buying.
  • Keep a 'price book' to track prices on frequent purchases.
I always keep a list and compare a price at various outlets, also I have a ledger and cash book to list out the amount that I pay for a day budget.  So lets do it!
See you on the topic 'Cultivate a saving habit'.


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