Making the most of your ‘little’ income

Many young people today are unhappy with their income because they feel it’s not enough to give them the comfortable life they desire. A recent report by the World Economic Forum estimates that 85 per cent of youths today would like to earn more than they currently do.

As a young professional, it is almost inevitable for one to start on a basic salary, earning enough to cater only for their needs. Most young people can’t afford to lead the luxurious lives that they spent their childhood dreaming of. This, if not well managed, is enough to send one to depression, or worse.

Samwel Kanja, a certified life coach and financial trainer, says that many youths lack self-awareness and fail to improve their spending habits, which makes them make poor financial decisions.

He advised that making the most of one’s little income begins with being conscious of your financial position, accepting it, and deciding to live within your means. These are the six pointers that Samwel believes could help a young professional gain financial stability.

Have a plan
There’s nothing that makes you conscious of your financial position than a good plan. “No amount is ever too much or too little,” Samwel says. What matters is how you use it, and without a plan, your income will always be too little.

Planning involves listing your expenses against your earnings, properly prioritising your needs, and preparing adequately for unforeseen future expenses. This way, you can track your expenditure, meet your obligations, and save enough for your immediate and future needs.

Diversify your income
If you’re dissatisfied with your income, then you’re probably not utilising your skills to earn enough. According to Samwel, every human is endowed with extra skills beyond their daily job which they can use to create additional income streams to supplement their monthly salary.

Manage expectations
To anticipate a good life for yourself and your family isn’t wrong. But if your expectations are not in line with reality, you must adjust quickly. Don’t spend too much time beating yourself up. Your parents, dependants, peers and friends certainly have expectations of you, but, as Samwel advises, you must ask yourself if these expectations are achievable. If they are not, you must be willing to adjust them.

Learn to save
While you might feel your income is too little to accommodate savings, many financial advisers insist that putting a fraction of your income aside is the key to financial independence.

“Many people think that savings should only come from surplus income, which is a wrong mind-set,” Samwel says. “To save effectively, you must accept to live slightly below your means.”

It might feel like an unnecessary pinch at first, but however little it is, saving is extremely important. It can help you buy houseware and other important items that you can’t buy from a single pay check.

Avoid debt and lending
Getting a loan is way too easy in today’s society. But Samwel advises that you must resist the temptation to tap into the many loaning avenues available for whatever reason, because this will delay your journey to financial stability.

Instead, direct those trying to borrow from you to the many lenders available because lending money is just as destructive as borrowing. You are not a lender, so you should not be afraid of making that clear to whoever tries to get loan from you.

Overcome your addictions
“Every addiction will either take money from you, or take time you’d otherwise spend making extra income,” Samwel says. “Therefore, you must be free of all addictions if you are to become financially independent.”

Dealing with addictions can be quite a task, but it is possible to overcome them. In very extreme cases, you can seek help from counsellors, rehabilitation centres, and even family members.

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