Our elders have a saying crudely translated as follows: the first money a young adult makes is spent on frivolities.
The first time I made money beyond my regular spending capacity was during my undergraduate internship programme. The company I interned agreed to pay me monthly stipends. However, when I got there the staff were living largely off other opportunistic income sources in the environment.
We had a department of 12 dudes: six permanent staff, three youth corp members and three interns. The excess money made from the "other opportunities" was shared on a weekly basis in the ratio 60 to 40 with the six permanent staff taking the larger part. Even at that, my take home every Friday was higher than the monthly stipend from the company. I was amazed.
After my first take, I dashed to the nearby eatery and had some decent meals. And with the knowledge that kind of money comes every Friday, I had no reason to reign in my spending habit. I bought the shiniest of things, ate the tastiest of foods and never had any reason to question my spendings.
About three months into my internship, it struck me that the internship will end in three months and I'll be back in school to complete the final lap of my undergraduate program. So I needed to save some money so my final year in school will be an easy one. However, I already developed a bad habit. Saving became an impossible task. I continued spending with reckless abandon.
When I resumed schooling for my final year, I had next to nothing as savings of any kind. Of course I knew my parents would shoulder my financial burden but I could've made it easier for them by saving a lot more from my internship. Unfortunately, things didn't go as planned.
My final year project consumed a lot of money and that ate deep into what would've been my pocket money. Sacrifices had to be made. That was the first time I regretted not saving some of that money I spent on frivolities. I thought I had learnt a valuable lesson but I guess I underestimated my level of stubbornness.
Not to bore anyone with stories, I've found myself again and again in situations where I had regular income and spent it all simply because I believed it would keep coming. And then one day, everything just shuts down and I'm back to ground zero looking like a lost puppy and wondering where to start from.
People these days get too wise with all the financial advisors all across the internet talking about how your money has to work for you and how it's bad to have idle money lying in your account. I am not here to dispute that. But from my experience, having money saved away is as essential as investing.
Yes, inflation can eat into the saved amount as time goes on but also, people that make serious money on some highly rated stuff like stocks and ForEx are way less than people that lose fortune on these things. That's not to say they are bad, and we have others like government bonds and treasury bills that are less risky and less rewarding.
Also, saving money can come handy to maximize some unexpected opportunities. In the present world we live in where unlimited opportunities abound online, opportunities come and go like flash. Whenever these opportunities appear, it's easier to access them if one is prepared. Having some saved assets that can be liquidated is vital.
Even in real life situations, some tangible assets become available for half the price probably because of promo or the owner of the asset is in dire need for money thus prompting him or her to devalue the asset. Those opportunities can't be assessed without a saved money in whatever form somewhere.
So, my point is simple: save money now. Yes, invest, but also, have some saved somewhere. No one prays for a hard life. However, the fact remains that tables can turn at any point in time. It's best to be prepared for the ups and downs of life than to find oneself unprepared in a precarious situation. It can be energy sapping, frustrating and punishing.
