MoneySkills with Nelson Letshwene

Money & the psychology of money

How Money Slips through your Fingers?

English: business,accounts,accountant,office,b...

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HOW DOES MONEY SLIP THROUGH YOUR FINGERS?

Money is magical. And one of its favourite tricks is the disappearing act! People say, it slipped through my fingers. How does it do that?

First of all, what does it mean “it slipped through my fingers”? I think it means they do not know where it went. How could they not know?

Many people do a budget for the month. All the major things are put on the budget: the rent or mortgage repayment; the car payment; water, electricity, fuel, telephone, groceries. Did I leave anything out?

Let’s see the slippery side of money!

The unaccounted expenses. How much of your expenses go unaccounted for? Let’s start with your lunch. If you take a lunch box from home to work, then your lunch is part of your groceries. But, if you buy lunch at work, do you know how much you spend per day for the twenty-two working days of the month? Let’s take an example: if you spend say thirty bucks (30.00) on lunch plus say seven bucks (7:00) for a drink, then you are spending thirty-seven times twenty-two working days, which makes eight hundred and fourteen bucks (814.00) per month! Did you include that in your budget, or did you think it’s negligible? Now, if your spouse is also doing the same thing where they work, then between the two of you, you spend one thousand, six hundred and twenty-eight bucks (1,628.00) on lunch only. Did you both know that? That is one slippery side of money.

Let’s look at other slippery sides of money. If you buy groceries for the month, but they’re finished a week or two before month-end, then you are forced to top-up! What happened to all the food? That means there was no management of resources at home. It’s either people in your household are eating simply because there is food; or there is a lot of wastage at home. It seems you might need to implement a home resource management system. I know it requires the co-operation of all members of the household, so there is need for leadership at home. Can you provide that needed leadership?

Where else does it slip through your fingers? You put a certain amount of money in your petrol tank, but you fail to account for your movements, especially over the weekends. Remember, wherever you go, you are spending money!

Another slippery area is right in your fingers: the telephone. You put a certain amount of airtime, but you call willy-nilly, even people you have no business calling.

If you ran your company without a management system, it will go belly up in no time. Why do you think a household can be run without a management system?

In terms of accounting, there are basic accounting applications out there like quicken, that could be used to track your expenses, but, as in all useful things, they require your commitment to work!

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One comment on “How Money Slips through your Fingers?

  1. m2wa2
    June 7, 2013

    Reblogged this on M2wa2 DigiTech..

    Like

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This entry was posted on June 7, 2013 by in Personal Finance and tagged , , , , , , .

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