As young people make the transition from student to having a steady job, the excitement of having a steady job can overshadow our common sense. A new job brings with it the desire for more things 0 we want to purchase a new car and all the things that we may have been waiting for a while to have. At the same time banks offer the delectable credit card which brings with it a greater desire to spend. Those first pay cheques can entice one to go into high credit and build up debt that can take years to overcome.
A saving mindframe:
First and foremost, one needs to build a budget after your initial savings. Saving should be integrated into your monthly cheque and only budget your monthly spending after your savings have been taken care of. The past few years have shown us the importance of saving -as job security is not necessarily a given. Saving should be looked as an investment into creating a means of security in the event of any uncertainty in your job. This will also assist in building a deposit for a future home or even for a car to allow for smaller monthly payments.
Once we have a job our first focus is on purchasing a car immediately. However, this might mean that it takes out a huge chunk from our salary. In purchasing a car, first wait to be permanent at a job – this is usually after a three-month period – and then only commit to an investment like a car. In purchasing the car reframe your mind to understand that it is not simply a purchase but rather a huge investment. Ensure that you factor in all the financial responsibility that is included in purchasing a car: car insurance, petrol costs, services etc. Your budget must cover all these expenses as well. Examine the different choices that you have – especially the difference in the price of a brand-new car versus a pre-loved vehicle. The difference in the price can be massive and can allow for major savings.
The credit temptation
Credit cards are extremely enticeable. But always try to never take out a credit card. Once you are in the green and in the plus don’t ever go into the negative. This means assessing whether you are purchasing because of a need or a want. The highly materialistic culture that we live in does not allow us to slow down and focus on the why of a certain need. Why do we want something – motivates the urgency of the purchase. Always give yourself time before you commit to any purchase. This small window of delay allows you to make a purchase that is beneficial and not detrimental.
Social media can influence purchases, so we must teach our children about money and the reality of being responsible with financial decisions. This means teaching them about the reality of life and not insulating them from the responsibilities of life.
Learning about financial responsibility:
Reading articles and listening to podcasts and learning how to run a budget, should be an integral part of adulthood. We have to inculcate speaking about money to our children and build a healthy relationship with wealth. When learning about wealth and budgeting, ensure that you are speaking to professionals and financial advisors that will give you advise that is both beneficial and at the same time backed with research. At the same time as believers, we have to incorporate the understanding of barakah, and the way charity impacts what we have. In understanding that charity is tied to having an increase in wealth we take away the fear of not having.
Listen to the full podcast here