Introduction

In our quest to be financially stable and successful, we need to inculcate basic financial skills that will be helpful and appreciated. Knowing how best to manage our finance so that it will grow, stabilized then losses. Financial literacy and discipline is what makes it different between wealthy people and poor ones despite being in the same neighborhood and engaging in business ventures regularly.

From the lifestyle of successful and wealthy people, their attitudes towards their finances worth emulating. They are highly disciplined as to spending but keenly interests on saving and investing for more growth and returns. They really understand the dangers of being reckless over expenditure and becoming wiser and disciplined when purchasing or spending their money. Let's examine some of the factors that will leads to unplanned and reckless spending and avoid them.

Factors That Facilitate Overspending.

Everyone spend their money for their needs and essential which are needed for good living and sustenance. But overspending can affect our finances and render us poorer so we need to avoid those factors that facilitate reckless spending. They include:

Lack Of Budget And Economic Plan.

Without Plan, One have planned to fail is one of the popular saying. This statement is true as one will spend recklessly because that one does not have in mind what one want to do with one's finances. Having plan and budget will make an individual financially wise because he/she knows how much, expected to flow in and being spend. In the budget, he carefully allocate his available on necessary items to be purchased, essential expenses, investment and savings too. With limited funds available, there will no rooms for impulsive and overspending that will affects his finances.

Having a budgets is a financial tool for proper management of finance. For example, My mother always went to the market with her simple budget. It is common among our people here, they have a piece of paper with their items to be purchased, estimated costs and total cost. With this aid, they have prioritized what they want and spend according to such items. They are expert on trade negotiations so that they will get discount based on their estimated cost and enjoy the leisure of purchasing everything, they wanted on fair prices. But one of my girlfriend, will go to market with money that's ten times what my mother goes to the same market with. She virtually come home empty handed because she have spend the money recklessly on things, not necessarily. She will even do her manicure and pedicure, dined out and bought expensive clothes when she supposed to get groceries for our food. This is possible because she and some of her generations behaves unwise and reckless when it comes with spending. Look at having budgets as old tools of no benefits.

Peer Pressure And Social Influences.

Buying latest products and services is not bad but getting them at very exorbitant prices is financial unwise. In order to get things, that their friends and peers have, they spend recklessly on those items and services. Peer pressure is a strong force that have influence many people to become financially unwise and get items of no value. For instance, my young sister decided to purchase one of the trending sandals among her peers. Truly, she does not need such sandals because she had many sandals of such kinds for events but others influenced her to get that particular sandals which was very costly because of the trend. She did not wear it even for a day when she purchased it because it's either her size or good for any events.

Apart from our friends, every other individuals around us influence us to spend recklessly. Mass Media plays a powerful role on how we spend this days. For example, youth around us dress and talks alike this days because of what social media does. TikTok influence our ways of lifestyle and purchasing. In order to met up with these trends, they have to overspend or recklessly.

Easy Access To Credit And Fund.

Easy access of credit cards and available money prompt many to be financially unwise as to overspending and reckless buying. For example, I love to eat and can buy anything that caught my eyes, just to get fed up. Having my credit card or available cash makes me a fool on the road because I will keep buying anything even if I don't need them and impulsively. The use of credit card have made it easy for buying everything, one desires without even considerations and out of budget.

Many people are very emotional and spend their cash to improve their mood. Those people have fun while shopping and that's their passion. For such attitude, they are financially unwise because they even get things not needed and impulsively. For example, Sarah was heartbroken because she caught her boyfriend, John with another lady. To be happy again, she found solace on bars and parties where she keep burning her money on things like foods and drinks. Such occasions prompt many to overspend or spend without plans.

Reasons To Save and Invest More

To be financially stable, one should be able to save and invest more but it's usually difficult because some of the factors mentioned above and more are very operative. What are reasons why we need to save and invest more? Let's talk about some.

Multiple Income Streams.

To be able to save more, one have to widen the income streams. With many incomes streams like jobs, shares, passive income etc, the income bases will increase. As more money inflow, more money will be saved and invested for more profits. For example, after clearing off the national debt by former minister of finance, Dr. Ngozi Okonjo- Iweala. Nigeria become more wealthy with huge income based especially from the sales of petroleum externally. The extra cash was saved as extra foreign account domiciled outside. Having more money makes it easier to save more and stabilized financially.

To utilize our numerous chances and channels of making more money makes one more richer than others. To utilize our time, effort and resources can boost our income bases and improve our savings. My friend is richer than me because of his saving habits. Although I received more salary as we work in the same firm. But, he does not use that salary for his expenses but get busy after work time with side jobs and earnings from them keep him financially afloat than us. He utilize his skills and expertises very well to become more financial buoyant and richer.

Having Financial Goals.

With goals, it will be easily to achieve them. Saving towards such goals is an objective of many people. For example, at my new year resolution, I want to buy motor car to ease my transportation burden and challenges. I started saving more money to buy a good car for it's importance. I even opened bank account and other unorthodox means of saving money to get enough cash for the project and goal. This approach have been helpful as it will be possible at the end of the year.

Goals are very important because it will make one to be focus and motivated financially. Because of the need to achieve the goal, one will be financially disciplined as to not to be spend recklessly but invest and save more money for such projects. Motivation is needed to make more money. Goals can serve as a motivational factor too. For example, To build a house and run a business enterprise, one have to get motivated to source more cash by being motivated and working smartly for more money.

Finally

Having more money via saving and investment profits will boost our income base and being careful over our spending will makes one financially secure and wealthy.

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The Importance Of Saving More And Spending Less.