When we are on the subject of Finance, falling into debts because of poor budgeting and having short term thinking isn't a new topic but it is wise to keep a reminder on these to have a healthy financial journey. It's not like I'm good with these two but they are what I admire in people I've seen who exhibit them naturally and it's been a positive for them.
It's one thing to have money, it's another to know how to work with budgets and think about the future while you make most of the present.
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In that regard, I would be sharing my thoughts on the aspects of perils of short-term thinking and ignoring budgets in our finances. Someone said these two aspects of finance are part of what keeps broke people still broke, as they don't see the need to think about the future or follow budgets.
The peril of short-term thinking in finance.
A quote says... You can't build a long term future on short term thinking.
There's something my mum once said that had me wondering and really thinking it's a truth that not many know about. Some young people wants to make all the money now not knowing they are taking the money from their future and that's why some end up broke after being rich for a while.
There are some logical meaning to this but the point is, it's hard for some people to think about making plans for the far future and so they are on short term thought, to make the money now and worry about the future when it comes. This isn't a healthy move for our finances.
Focusing on our immediate gratification can cause deficiency in our long-term financial health. Satisfying short-term desires at the expense of future economic well-being and a perfect example of this habit is neglecting savings for retirement to care for the present.
The peril of ignoring budgets in finance.
I thought using some quotes to back up my thoughts on these aspects of finances is a good way to go so here is another quote about budget...
A budget tells us what we can't afford, but it doesn't keep us from buying it.
I'm a witness to what budget can do to anyone who's active with it, saving more and overcoming spending on unnecessary wants are what only budgeting with self control can help with. So there's need to be aware of it's perils in order to take budgeting serious for our financial health.
One of the powers of budgeting is that it stands as a foundation for money management. When one is not clear on income versus expenditures to create a balance, spending more than you can afford is easy, and this would lead to a situation of overspending or inadequate savings.
Budgeting helps identify unnecessary expenses most importantly, it helps with debt reduction which is the greater Peril of ignoring budgets, falling into debts. I've seen people go very practical in budgeting by embracing tools like budgeting apps to keep their finance in check and also having clear picture of where your money is going.
If these two aspects of finance are practiced to an extent, a healthy financial life isn't so far from such an individual. What do you think about budgeting and short-term thinking?
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