Simple Ways Families Can Manage Cost During Recession
Truth be told recession is just a word. A simple Slowdown in activities over the course of a normal business cycle can breed recession. (what analysts may call a negative growth over two successive quarters).
We are presently experiencing economic recession that is a headache but we should start praying against depression (although I don’t see that coming). With increased borrowing and spending we may stimulate activities and get out of recession.
My major concern is family. How can the family enjoy financial freedom during recession?
1. Get a list of all the items you regularly spend on in the house. Your car, your refrigerator, Air condition, Pay TV, Gas cooker, internet etc now check the percentage of your monthly income that is allocated to service these items. (although some items do not require monthly servicing but you can do the breakdown and fit it in on a monthly basis). After a thorough check you should not allocate more than 25% of your monthly income to service these items. Simple Ways Families Can Manage Cost During Recession Simple Ways Families Can Manage Cost During Recession Simple Ways Families Can Manage Cost During Recession
2. Learn how to save, spend and invest. Most people don’t know the difference between saving, spending and investing. In the practical sense even some learned people don’t. Ideally you should not save to spend. A family should not save to spend rather save to invest. I have come across people who believes saving their money is the same thing as investing. A family should save with the intent of investing (making more money) rather than spending. That is why you should have several accounts for different intent. Account a will service expenditures and account B will strictly be for investments.
3. Do not involve in non profit activities yet. What will it profit you to travel down to your village spend 50m erecting a magnificent structure then lock it up and travel down to lagos or where you came from? Avoid such thoughts during this period. It is good to have a house in your village but if the house is not brining in anything and no one is living in it then it is a waste of resources. So I will advise you to tell your architect to design your house in such away that some parts can be let out and money can be made by collecting rent/lease (if you insist on building the house) Simple Ways Families Can Manage Cost During Recession Simple Ways Families Can Manage Cost During Recession
4. Financial education should be taught to the children as well as basic management principles (instead of teaching a child sex education). This could save the family some pennies. If a child constantly loses his/her toys you may have to spend money replacing it. My sister told me about a child who smashed the neighbours windscreen (recent benz car) with his basket ball. And the neighbour insisted full payment for the damage. Teaching your child to be orderly can save you unnecessary expenses.
5. Cost of feeding and eating right can be properly looked into. The family can save a lot if they eat right and stop being gluttons. A long time ago I told my niece not to consume all the milk in a can once it is opened. She likes unsweetened evaporated milk a lot and can actually consume 2 cans per day (morning and night) I spent almost 7000 for her milk consumption monthly. When I instructed her to use 1 can a day I saved 50%. According to a nutritionist we often eat more than our body can actually absorb (it is not a must you consume two sizeable piece of chicken). So we can check our family eating habit and ensure we eat healthily at the same time cut excessive eating pattern.
6. Entertaining guest can also eat into your savings. Ensure you have totally planned it out before inviting a guest over because it is African for you to entertain your guest. I could remember running into an old colleague and she said “wow marxwel I just want to know your place”….it was cool though but financially it wasn’t. So think before you tell some one to come over. When someone tells you “I just want to know your place” do not forget it may involve cost. So the family should turn down any frivolous or unwarranted visit from guest during this period.
7. Don’t create a competition. Please don’t get desperate because your neighbour just changed their car then you remember it’s time to change yours (I hate neighbours) or your colleague at the office just changed theirs and you are tempted to follow. Learn to flow with your budget and be rigid about it.
8. You may hold on the next issue. If you already have three kids and thinking about the fourth you should probably calm down a bit. Although your company may pay child support, education allowance and your health insurance may cover the fourth child. Please note that some unseen financial implications comes with a child even when you think you have it all figured out. Also I think it’s best you engage your wife if she not engaged.
9. A close knit family can save cost during this period. This is because items (clothes, shoes, wrist watches bags etc) used can be passed from a member to another toms shoe can be worn by Jerry if it is still in good shape. This will save you from buying an additional shoe on the short run. Also you may patronise not too expensive designers during this period eg Michael Kors, Zara etc
10. This may not be a good period to cheat on your spouse. Having a side chick (according to NL) is an additional cost. Cheating is expensive. Let me say quit flirting. Yeah you might just want to flirt with a lady and she requests for something expensive and you may ending up paying with your debit card. the list is endless.
Having a wonderful family is the best thing that can happen to anyone. Family is amazing. Watching my niece scream, ask irrelevant questions, jump around, get fascinated by trivial things is the most wonderful thing I have ever experienced. Children are blessings. You should not trade your family for anything in the world. Sadly people get divorced because they don’t know the joy in having a family. I wish every NL family a financial breakthrough during this recession.
11 Pray to God for direction.