We all have only one chance at life, and this is perhaps why we try and live the best one possible, as early in our lives as possible. For majority of us, there is a direct financial implication to this aspiration. While there is nothing wrong with living your best life now, the consequence is that the desire for instant gratification prevents us from planning for sustainability.
As a result, life becomes a repetitive cycle of exciting highs, when abundant financial liquidity allows us to live the “high” life, followed by stressful lows, when financial liquidity crunches force us to make very uncomfortable lifestyle sacrifices.
The ideal scenario is a lifestyle that starts off from a conservative baseline, which then improves, at a rate that is slower than the asset base backing it up, to ensure that there is no regression, irrespective of the economic conditions at any point in time. There are a few who have mastered this, and so can you.
Here are basic rules that you can follow to check on your sustainability:
- Prepare for your future – What are the boundaries necessary for you to meet your financial goals? How do you balance regular expenses against irregular expenses? Do you distinguish between needs and wants? Are you succumbing to consumerism and instant gratification? If you are not financially secure, then there is a risk of major disruption to your lifestyle.
- Build plans for emergencies – Any financial plan you have should incorporate predictable emergencies such medical needs, road accidents, risk of burglary or fires, deaths, births, job loss etc. The occurrence of these incidents in life is not certain, but in some cases, is predictable and can be mitigated by financial planning that would include insuring against these risks. Being prepared will dramatically reduce the impact of the occurrence on your financial situation.
- Practice financial responsibility – Financial discipline is a habit cultivated through practice. Once achieved, it allows you to make sound financial decisions that give you peace of mind. Like any other skill, this takes time and deliberate effort to build and sustain. At CCC we can help you start your journey towards sustainable financial freedom by providing you tools that equip you in budgeting, investing and strategic financial planning.
You may reach Motho Kimotho on Motho@coursecorrect.co.ke.