Monday, September 26, 2016 3.38 PM / Taiwo Ologbon-ori, TheAnalyst
It is very important now than ever to learn how to control our lifestyle as we cannot control what happens within the economy. FG is yet to roll out stimulus packages, which means the recession may take its full course on the masses. The time to go back to home management basics and be individually less wasteful is NOW.
The current recession faced is one that would most likely result in a change of lifestyle as people are forced to adjust, readjust and make tough decisions. Recently, a man narrated how he had to relocate his little family (2kids & wife) back to the village as he discovered he cannot survive with them in Lagos due to the surge in the cost of living. He was strongly confident that the little monthly up-keep would have greater impact in their lives in the village than in Lagos.
In my response to him, i said perfect decision and a commendable strategy. In my mind, i was able to describe his approach as ‘living within your means' and this has inspired this article as a follow up to our previous articles on 'Recession'.
You will agree with me that, the effects of recession are still in the making and living above ones means would add and compound the economic hardship currently experienced, which may also deter one from taking advantage of some emerging opportunities.
This cannot be over emphasised, Living within your means makes good financial sense before, during and after recession. It is not only important to improve your income but also necessary to cut unnecessary spending/expenses. To take control of your finances, the following key signals that you are living above your means are.
· If you are always running-out of cash without savings to rely on. You have No savings to survive few months after job loss- you need to halt this pattern and find a way to free-up cash flow by spending LESS.
· If your annual house rent is above 25% of your annual income, you are definitely living above your means. You may need to adjust this as soon as possible. However, I advise this might not be necessary if the location increases the proximity to your office, which translates to lower transportation expense, it still makes sense. The bottom-line is to free-up cash flow for savings to grow
· If you cannot always meet your obligations as at when due as a result of low cash position, this shows you are living above your means. Examining and adjusting your spending habits can solve this problem
· Growing consumer debts, I-O-Us and Salary advances from friends, families and colleagues- you may need to revalue and reconsider what you utilized the loans for and cut down accordingly to free up cash for savings
· You are always borrowing from any available person, which has made you to become an irritant. Friends, family and colleagues now avoid you and your calls due to your borrowing habits
· If you are always trying to belong or catch-up with high spending friends or clubs
· If you are always exceeding your monthly budgets, which usually throws you into debt.
· If you feel guilty about your spending habits, you are under any pressure to lie or hide your purchases, you’re probably spending over your limit
In conclusion, living within your limit or your means gives you more financial freedom, purchasing power and peace of mind during an economic recession. In the absence of this, you may end up with pile of debts. Learn to be frugal, so you can grow savings for raining days. You may stop buying BRANDED or Designer stuffs to start with. It makes BIG sense to take home-made lunch to the office now, patronising shopping malls and eateries for your home needs is not the best way to go during this period of recession.
While we would appreciate your feedbacks, we would also like to encourage you to share your experience with us on your survival moves, options taken and what more you would like to know. Kindly send in your personal stories, views and comments to email@example.com and firstname.lastname@example.org
Keep a date with us as we bring more article(s) on dealing with #RecessionInNigeria
1. Recession: We Have Been Living Above Our Real Means as a People
2. Five Effects of the Recession on Families and How to Cope
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5. Recession: Lagos parents withdraw kids from private schools - Punch
6. Way Out of Economic Recession – Temitope Oshikoya Sept 11, 2016
7. Recession: how deep and for how long? – FDC Sept 11, 2016
8. Unemployment Soars as Recession Bites – Sept 02, 2016
9. Recession, Personal Income and Planning
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11.How to Swim the Heavy Water Current During a Recession – Aug 19, 2016
12.The Law on Debts After Death ...
13.How To Succeed With Your Money
14.Video: Recession in Nigeria: JNCI CEO outlines how business can navigate .Sept 10, 2016
15.Video: How Recession is affecting Consumer Confidence in Nigeria – Aug 30, 2016
16.Video: The discourse on Nigeria's recession – 2nd NSE/BLOOMBERG CEOs Roundtable Sept 01, 2016
17.Video: Nigeria is technically in a recession-Mrs Kemi Adeosun – Jul 21, 2016
18.Video: How Nigeria can navigate through recession – Jul 26, 2016