Imagine going out for “urgent 2k” daily, and at the end of the month, you wonder where the hard work went. With just one alert, it’s gone—poof!
Smart Money Choices or Sapa Lifestyle?
Have you been making smart money choices, or has the state of being “broke” been a lifestyle?
Your bank account breaks your heart more often than your toxic talking stage. The ice cream you bought still feels like a financial mistake. You wish to satisfy that shawarma craving, but it has a whiff of guilt to it.
You might wonder why this keeps happening to you. Why do we keep making the same financial mistakes?
What Does Smart Money Mean?
Do you actually know that making smart money choices isn’t about being stingy or frugal; it’s about making informed decisions? Of course, you can choose to be frugal…to each their own.
Smart money is capital invested by financial experts for the purpose of profit-making. Smart money decisions start with self-awareness. You’ll make better choices when you examine your spending habits and dig into why and how you spend money.
The Money Mindset
The truth is most of us were not taught money matters. Most people grew up in humble beginnings, and others in abundance. Consequently, people with these backgrounds tend to react to lack with savings or splurging, as the case may be.
Therefore, your background, how you think, and your values shape how you spend. Having money is different from money management. Your relationship with money should be built on a foundation of discipline.
Financial Discipline
While a little impulse spending here and there harms nobody, it is essential to set your priorities straight. Embarking on smart money moves requires discipline.
Despite the discipline, you don’t need to deprive yourself of the pleasure of spending the money you worked for. Why overhaul your life overnight when you can start by setting small goals? Appropriate what portion of your earnings goes to savings, investments, black tax, or miscellaneous for your impulse spending. It’s not the thoughts that count; it’s the habits you cultivate towards achieving your goals.
Discipline is the password your bank app needs to stop engaging in unnecessary debit alert transactions. But what can be unnecessary or necessary?
Know Your Numbers
Honestly, it’s not you. It’s your orientation. There is an erroneous belief that budgets are kept by stingy people. On the contrary, budgeting is not a punishment. It’s financial preparation to break the cycle of lack. Well, it should be one of the core smart money principles, if there are any.
To avoid your salary vanishing too quickly, have as much clarity on your regular monthly expenses as you do on your earnings. Then use a simple budgeting rule like the “50-30-20 rule”:
- 50% for needs (bills, food, transport)
- 30% for wants (Netflix subscription, shopping, girls’ brunch)
- 20% for savings or investments
This will help you manage your money by prioritizing necessities and some discretionary spending and ensuring you are saving for financial goals.
Investing for Beginners
You can’t leave money idle in your bank account and save your way to wealth. Savings keeps your money, while investments multiply it. Investment might sound like something only the rich do, but you can actually start small.
With the emergence of mutual funds and fintech apps, beginner-friendly options are now available. Investment is like a tiny seed you plant; you water it with consistency and give it time to grow. It’s not a ‘money-doubling scheme’ or a “get rich quick” offer.
Financial Red Flags
Most people have fallen into money traps out of naivety or out of FOMO. You might have bought into the idea of an investment scheme a friend swore you would cash out on, but it crashed when you joined. Or you probably decided to buy some dresses you bookmarked for weeks.
If you want to make smart money choices, look out for these red flags:
- Limit impulse spending—buy things because you need them.
- Audit your lifestyle—your earning capacity should encourage you to invest and save more, not spend more.
- Peer pressure—Don’t play the “I want to belong” with people who are earning more than you.
- Ponzi scheme—If it’s too good to be true, it probably is. Avoid get-rich-quick schemes that promise impossible rewards.
Smart Spend
Smart money choices don’t happen overnight. It involves being intentional every time you have to make spending decisions. There are quick tools and investment apps to help you spend smarter, from simple investments to budgeting. Take charge of your finances, and make smart decisions.
