The status of employees in the society depends on the
standard of living they are living which can be traced to the type of job, the
house they are living and the way they presented their self to the society.
The attractive salary package offered by an organization
shows the level of and its significant in the economy. As a result of this,
taking banking as an example, banks offered the most attractive salary for
their employees which make some of them show off luxury life in all aspect of
their lives. Starting from the apartment they live, their rides, wears and
others.
Although some employees were hugely paid, while some are
not and still yet, they spend almost all their salary on unnecessary items.
This post will show you how to be rational in spending of
your monthly salary. At the end of this article you will get to uncover the
tips to avoid overspending
TIPS TO AVOID OVERSPENDING OF
MONTHLY SALARY
- SAVINGS
- BUDGETING
- MISCELLANEOUS
- OPPORTUNITY COST
SAVING
This is the
habit of is income not spent, or deferred consumption. Methods
of saving include putting money aside in, for example, a deposit account,
a pension account, an investment fund, or as cash. Saving also
involves reducing expenditures, such as recurring costs. In terms
of personal finance, saving generally specifies low-risk preservation of
money, as in a deposit account, versus investment, wherein risk is a
lot higher; in economics more broadly, it refers to any income not
used for immediate consumption. An employee with improve savings habit will help
reduce overspending and have more fallback than others.
BUDGETING
A budget is a financial plan for a
defined period (monthly), or often one year. It may also include planned sales
volumes and revenues, resource quantities, costs and expenses, assets,
liabilities and cash flows. Companies, governments, families and other
organizations use it to express strategic plans of activities or events in
measurable terms.
A budget is the sum of money allocated for a particular
purpose and the summary of intended expenditures along with proposals for how
to meet them
MISCELLANEOUS
A stressed up person will want to get some refreshments
or need something to cool down or re – regulate the body system. Miscellaneous
can be inform of refreshments like ice cold water, cloth, milk, tea or others
as such. A rationale employee should be able to control him/her in spending too
much on this.
OPPORTUNITY COST
Opportunity cost, also known
as alternative cost, is the value (not a benefit) of a choice,
relative to an alternative. When an item is chosen from two mutually
exclusive alternatives, the opportunity cost is the "cost" incurred
by not enjoying the benefit associated with the alternative
choice.
The New
Oxford American Dictionary defines it as "the
loss of potential gain from other alternatives when one alternative is
chosen." Opportunity cost is a key concept in economics, and has been described as expressing
"the basic relationship between scarcity and choice."
Example: an employee who is in need of
varieties of items get confuses on which item should purchase with a limited
resources of ($25).
Opportunity cost says “Choose the items
of the most important based on the limited resources”. A rationale employee
should be able to list his wants and decide on which one to attend to with the
resources.
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