Think of a situation if there were no laws to control the moving traffic in a country. Will it not lead to a complete chaos and there is no way one could have reached an identified destination timely as well safely.
Since there are laws governing various matters, we as responsible citizens of the world are duty bound to follow these laws in totality. Any non-compliance on our part will penalize us in one way or the other. Thus the most important thing which any law of the land would teach us is its strict observance on our part. But if there were no laws in existence don’t you agree there would have been a total anarchy across the world.
This proves the point that as there are certain laws to comply, we have no choice but to comply. If we take the same corollary to money matters, don’t you think there is also a similar need to frame certain self regulating laws? We know the importance of laws in a civilized society and similar would be the case on money matters. If you don’t follow any set commandments, rules or guidelines, then your goal of financial independence will always elude you.
There is saying that “if you don’t know where to go, then any road will take you there”. Therefore, first and foremost one must know where he/she wants to go [i.e. ultimate goal], and the next step is to frame the required self regulating rules to reach there. We all know the importance of discipline in our life. Observance of discipline is nothing but a perfect example of self regulation on our part.
The above stated text clearly demonstrates that one must always pen down certain self regulating laws to govern one’s money matters. There could be several examples of such self regulating laws and depending on one’s circumstance such laws can differ from one person to another. However, there are certain universal self regulating rules, which each one of us must observe. Some of these self regulating rules or guidelines on money matters are as follows:
“Spend less than what you earn”. Under no circumstances you must allow yourself to go back to the days when you spent freely and stuck your head in the sand when it came the time to pay the bills! If you observe this rule, for sure slowly and steadily you will be able to create substantial savings on your part leading to financial independence. Non compliance of this commandment will make you to fall into a debt trap with serious consequences.
The best way to ensure compliance of this rule is by following the commandment which states – “pay yourself first”. Money, like water, expands to fill the container in which it is placed. If you lack an objective set of financial goals in your life, you probably reach the end of each month and find yourself completely broke. You vow that next month will be different, but it never is.
This scenario is certainly the one with which millions of people can identify themselves. Fortunately, it doesn't have to be that way. One of the most powerful and effective strategies for building wealth is to pay yourself first. When you set down to pay your bills, the first check you write should be to yourself.
The next rule in this series is to “spend money where it matters most”. How do we ensure compliance of this rule? This is simple if we can prioritise all our expenses. Do we need a lecture as to how can prioritise? I think each one of us is the best judge to prioritise one’s expenses. If one can’t do it then the best thing is to prepare the monthly budget. Once you have the budget ready, it would be far easier to identify those expenses which can’t be avoided and the ones which can be done away with, at least for the time being.
The list on self regulating rules on money matters can go very long. But it is important to close it by mentioning one of the most pertinent rules reminding us that “there is always a limit, and thus don’t chase money mindlessly”. Without this rule in our kitty, the greed for money overtakes everything and we lose focus in life.
Therefore it is important to always remember that although money is valuable but there are many more things in life which command more value than money. I think now is the time for me to conclude so that you can start making your own self regulating rules on money matters. Cheers!!!
Jagjit Singh Technical Adviser, Unit Trust of Tanzania, Email: email@example.com