Internet, expenses & budgetBy Randell Tiongson on July 6th, 2009
As I write this blog, I am very annoyed at how poor the service of my internet provider. It has been 9 days since I lost internet connection and despite my daily follow-up with their customer service, I still need to get a resolution from them. It is already a pain trying to call their service line where call abandonment rate is unbelievable; but it makes it even worse that they tell me the same thing day after day – “system restoration” and for me to observe my connection within 24 hours. I hardly think that 8 days is the same as 24 hours.
Aside from the fact that my household is severely inconvenienced by my provider’s incredibly poor service, I find myself spending a lot of money on pre-paid broadband connection… more than P 1,000 already as of this writing. In addition, my provider would probably still bill me for a full month; talk about a double whammy and a total waste of good money.
This may not really be ‘big money’ to others but I got into thinking how many of us experience wasting money unconsciously or forced by circumstances. My experience may not be considered ‘big money’ but if this situation goes on, I stand to continue to ‘waste’ money. Come to think of it, how much money do we spend that may not be necessary to begin with? The old argument of needs vs. wants seems to always surface.
During a personal finance seminar I conducted for bloggers last week, I talked about how ‘small’ expenses add up and we just realize that we have overshot our budget by a mile. I made a funny remark on how some people have a tendency to spend excessively on things because of the urge to spend and the immediate gratification that it brings. In the said seminar, I joked about how women have a ‘thing’ for shoes and that it is easy for them to go overboard. After the program, a nice lady blogger confessed to me that she has over 60 pairs of shoes. The men are not spared from excessive spending too – they just spend on different things than the women. For some people, they can go overboard on their hobbies while for the others, they can overshoot their budget in many small expenses done with a high frequency like eating out and the like.
I am not saying that we should totally stop from spending money on our ‘wants’ as we fully know that it is necessary to experience joy in life. What I espouse is for people to be more mindful of the things we spend on; even the ‘small’ expenses as they do add up very quickly. Here’s a tip: if you are fond of dining out, try to set a budget allocation for it but being mindful of your total budget. Allocation for expenses, whether it is a need or a want will help you manage your cash flow better. When you have set your allocations, be disciplined enough to follow it. It is impractical to totally rid out all those ‘wants’ from your budget as we know we can’t follow it. Good diets allow ‘cheat days’, otherwise sticking to a diet becomes very difficult – the same principles apply in our cash flow management.
If you have already usurped your allocation for your ‘wants’, it is in your best interest to stop and wait for the next cycle, like next month. In this way, you remain on track with your financial goals while still enjoying some form of gratification.
The reason why some people find it difficult to craft a budget and follow it is because their goals are not really practical. Let’s say you like fine dining and you found yourself with a challenged cash flow because of it, it is more likely that they will totally remove that activity from their spending plan. However, the urge to experience the gratification one is accustomed to becomes so intense that we will end up forgetting about the goal for the moment and we are in danger of going back to our old self soon. By including the ‘wants’ in one’s budget, albeit in a more programmed fashion, we can have our cake and eat it too.
Here’s another tip – be mindful of your ‘wants’ always remembering that there are things that are more valuable in life that can bring us true pleasures. “For where your treasure is, there your heart will be also (Matthew 6:21, NIV).