What do you do when you get your paycheck? Earning your money might provide you with an exhilarating feeling of your efforts finally paying off. The first salary and the message that is accredited to your bank account is an exceptional and satisfying feeling for anyone who has just started earning.
For those who have been in the workspace for some minutes, PAYDAY is always a good day! Don’t you just want to grab that lunch, drink or that dress you screenshot off Instagram? Well while there is nothing wrong with all this because you worked hard all month and you deserve it.
Whether it’s your first salary or not, the level of excitement is still the same and while you always have an idea of what you are going to do with your money, you often feel like there are things left out and you actually never buy or do what you had initially intended to do. To guarantee a win, it’s important that you create a money routine that will keep you financially fit in the long term. Avoid the financial treadmill by all means.
One way of avoiding the treadmill is by making sure you’re heading true ‘East’ on your wealth compass. The Wealth Compass is a metaphor that Cause Capitalist Steve Down uses to conceptualize human spending. He highlights this intriguing concept in his book, Financially Fit for Life.
Each compass point can show you where your salary goes.
West spending, is the money we spend on instant gratification: furniture, a high-end accessory, a dress or a new vehicle. Whilst there is absolutely nothing wrong with spending your money on these things, it’s important we know that money spent on this area is depreciating in value.
South spending is the money used on repetitive purchases on everyday essentials such as food clothes, rent, water and electricity. They expand and may equally exceed your income level if not cautiously looked upon and more of your income raise maybe lead to a rise in demand. (more salary, bigger house?)
North spending is money used on financial daily leaks which are driven by impulse or influenced by indulgence. such as take-outs, fast food deliveries and door-to-door delivery fees. All this may seem harmless besides it’s just a few coins but given the time, the amount used on North spending could be significantly a huge amount.
East spending: East dictates that money is spent on assets that appreciate in value.
Now that you know how and where your money goes, here are steps to help you make better choices.
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