Personal Finances 101 Textbook: None. Course will be based on online essays and materials. Instructor: Mba Mbulu
Class #6
Steps Toward Personal Financial Triumph
Keys to Successfully Managing a Budget
Minor considerations often spell the difference between victory and defeat, or owing money instead of owning it. Following are three small factors that can be easily overlooked. Don't overlook them!!
Review is a constant in this course. Always check your notes from earlier classes. It will enable you to blend in everything more easily.
(1) Recognize the difference between necessities and non-necessities.
What is a necessity? A necessity is anything that can cause serious
harm if it is lacking. Food is a necessity. Shelter is a necessity.
Clothing is a necessity. On the other hand, an abundance of food
is not a necessity. More than adequate shelter is not a necessity.
More than adequate clothing is not a necessity.
The trick is to determine what the difference is between adequate
food and an abundance of food, adequate shelter and lavish shelter,
adequate clothing and excessive clothing. You, as the person who
is in charge of your dollar, must determine the boundaries and
make decisions that are consistent with those boundaries.
What is a non-necessity? A non-necessity is anything that can
be done without. As the person who is in charge of your dollar,
must determine which items can be done without and determine how
much of your budget to spend on such items. I will make an unscientific
guess: at least 25% of the purchases made in the United States
go toward non-necessities and abundances. The likelihood is that
you can cut your spending appreciably and not see a noticeable
decrease in your standard of living. If you are experiencing financial
difficulties, and most Black People are, you should eliminate
some of the non-necessities.
[Top][Personal Finances101][BuyBooks][TheBlackEye]
(2) Don't fall victim to your impulse to buy. Impulse buying is a budget wrecker. But worse than that, most impulse buying is on purchases that you could very easily do without. I would argue that impulse buying is a waste of resources 99% of the time. Marketers and business people know that. They also know that much of their profit would be lost if people did not engage in impulse buying. That is why they set up situations and conditions that encourage you to buy impulsively. As I stated in an earlier lesson, only buy what you have planned to buy, what you have put serious thought into buying. That way, your budget will not get overextended.
(3) Don't fall victim to your family members impulses to buy.
This especially applies to children. Most parents have a weakness
for their children's desires. You have to learn to treat their
desires as you would every body else's desires. Plan purchases
for them within the context of the overall budget. What they think
the "absolutely have to have" is a product of their
impulse responses. Marketers and businesses direct ad campaigns
at childrens' impulses and parents' reluctance to say no to their
children. Don't allow business people to use your children against
you, and don't let your childrens' impulses outweigh your carefully
considered decisions.
Remember: Your children will make it just fine without most of
those "must have" items. Additionally, it is good to
use opportunities like that to teach them that they should not
expect to get everything they want in life. They must learn to
purchase selectively and wisely. Unlike on tv, the better things
in life are not easily or quickly acquired. If your children see
you make careful, selective purchases, they will be more likely
to make careful, selective purchases when they have money to manage.
Questions? Email aset@asetbooks.com and list your course title as the subject.