Planning finances properly and correctly is always a challenge to deal with. Whether it comes from the temptation to shop for something you don’t really need or from unforeseen circumstances that drain the savings that we have accumulated for a https://ipnuippnupati.id/ long time. On this occasion, the BFI Finance team discussed the extravagant habits that interfere with our financial planning. Through the article below, we provide an understanding of what are the negative impacts of an extravagant lifestyle and how to avoid these wasteful habits. By living a frugal lifestyle and meeting your needs according to portions, you have a great opportunity to enjoy a comfortable and happy future.
5 Negative Impacts of a Wasteful Lifestyle
Here are six negative effects of an extravagant lifestyle that you need to be aware of:
1. Can’t Save
The negative impact of the first extravagant lifestyle is not having enough money to save. Saving is a lifestyle that should be taught from an early age. There are many benefits of saving, including preparing for a better future and maintaining a stable financial condition.
From the monthly income you receive, you can allocate at least 10% for saving. You can separate a separate account to save so that it is not used for unplanned activities. If you do it consistently and with full commitment, then it is very likely that you can raise money quickly.
2. Debts and Bills Piling
Debt is not something that is forbidden. However, we must be able to determine wisely what we owe. Is the debt for productive credit or consumer credit? Make sure you have an acceptable basis for borrowing some funds through an external party.
In addition, things that can trigger bills and debts that accumulate are derived from the use of credit cards. Credit cards do make it easier for us to get assets faster, but if we can’t control their use wisely, be careful if one day your bills pile up. So, understanding how to use a credit card correctly is something that we must hold.
3. Don’t Have an Emergency Fund
Another negative impact of a wasteful lifestyle is that someone doesn’t have time to prepare an emergency fund. An emergency fund is a fund that is set aside from the income you receive to anticipate unforeseen circumstances or conditions such as termination of employment (PHK), medical costs, house damage, and others. With an emergency fund, you can meet unexpected financial needs without borrowing from your relatives or family.
4. Old Age Is Threatened
Old age is a time when we feel what was planted when we were young. Various preparations are made to be able to feel a comfortable and happy old age, such as preparing a pension fund, emergency fund, insurance, and others. Always have a strong financial plan when you are young so as not to be negatively affected by this threatening extravagant lifestyle.
5. Stress
With bills piling up, not having an emergency fund can make it easier to feel stressed. Stress is the negative impact of an extravagant lifestyle that is perhaps the easiest and most often felt. Having no money but having to survive such as to make ends meet all day, transportation is an example of a real stressor. If you are frugal, you are likely to be able to avoid excessive stress. As a start, living a frugal life may seem difficult, but if you have lived it for a long time and consistently, it will feel light and used to it.