Your attitude to wealth is reflected in your budget

The reality of wealth versus poverty in any part of the world is one where about seven in 10 people are poor and three are middle-class earners. PHOTO | FILE

What you need to know:

  • Young middle-class earners generally spend all their income of the early years in the hope that as they age, income will expand enabling them to save and invest.
  • The activities involve turning wisdom from your personal philosophy and inspiration and combining it with a good attitude to produce new and better results.

The reality of wealth versus poverty in any part of the world is one where about seven in 10 people are poor and three are middle-class earners.

Other than the disparity in income size, the poor and middle class are not different at the core, and budgeting among them is an aesthetic exercise that allocates money to wants that make them happy in the “now” moment.

In “Why budgets are money habits, not numbers”, we said that you can never overcome your inner self. We also said that budgeting is not the distribution of money across the long list of unavoidable expenses and savings.

Like a train, we run on a single lane of habits, controlled from our intangible self. To make visible personal change, we must literally move from one lane of habits to another, which follows a mental shift.

Psychologists agree that you must change your basic foundations: Your personal philosophy (what you know and your decisions), attitudes (how you feel), and activities (the disciplines) in order to alter your results. For example, your present budget and financial position is a reflection of how you view your world, the resulting attitudes and activities.

Young middle-class earners generally spend all their income of the early years in the hope that as they age, income will expand enabling them to save and invest. Mature people in the middle class know this truth from personal experience. Unfortunately, they deposited this illusion in the mindsets of their children through their behaviour.

While your philosophy is what you know and the decisions you make, your attitude, on the other hand, reflect how you feel about your past, the future and the market place. The poor and middle class allocate money more according to feelings than hard decisions, usually due to limited knowledge of opportunities where the money could be put.

The activities involve turning wisdom from your personal philosophy and inspiration and combining it with a good attitude to produce new and better results.

The poor and middle class allocate little time and income to learning how to take risks, therefore they do not change what they know, their decisions, attitudes, and activities, thereby missing the boat of opportunity from one generation to the next.

Patrick Wameyo is a financial literacy educator and coach. [email protected]