Individuals should spend within their income levels in order to be happy. However, there is a category with good jobs and earn a decent income, but undergo the same problem.

The scarcity mentality approach to money can be made worse by trying to keep up appearances. When your income is not enough, you need to look at factors that control your spending decisions.

Individuals should spend within their income levels in order to be happy

One of the things that you need to examine is whether the financial decisions you make are driven by the need to maintain an image that is commensurate with the job you do.

Initially, this could work for you at the time you land the job and the perks that come with it. However, when you get obsessed with upgrading possessions that are mostly liabilities, you cannot avoid living beyond your means to finance your new lifestyle.

Lifestyle choices may include, place of residence, school for your children, entertainment, transport you use and the gadgets you own. But are they within your income bracket?

Anyone who has risen through ranks has to deal with snide comments from peers regarding the need to change your home address, gadgets and clothes you wear to in order to suit your image.

When you become uncomfortable, are forced to upgrade your gadgets every six months or less, shift to an upmarket neighborhood, join exclusive clubs to network, shift the children to trendy schools and drive less fuel efficient vehicles, the lifestyle becomes a setback to your financial goals.

The continued focus on maintaining an image can easily degenerate into irresponsible use of credit. You may borrow to furnish your home so as to match expectations of your peers whenever you host them.

Within no time, you reach your borrowing limit and the next best option is to resort to money lenders to finance the ?upgrades.?

The little income left after servicing debts is committed to clearing the loans. To avoid this lifestyle trap, it is important to set achievable financial goals and timelines to achieve them.

Make friends who add value, seek information on personal financial management, cultivate the will power and discipline to save, invest, borrow responsibly and spend wisely.

As a result, you will be in a position to stay on course of financial discipline, to generate resources to acquire assets, provide extra passive income, irrespective of what your peers say.

Once you grow your passive income to the extent that it can finance more than your immediate needs, you can be able to support the lifestyle you want in a more sustainable way.

The writer works with Bank of Uganda

By Sylvia Juuko, The New Vision

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