Bill Gates once said, "spending money wisely is as difficult as making money." The same amount of money, when in the hands of different people, will have different flows and values. Some will spend it on anything they want, some blindly chase trends and swipe their cards impulsively. There are also those who live frugally, measuring the cost-effectiveness of every purchase. Money is a mirror; the way you spend money reflects your knowledge, vision, and level.
People with low awareness fall into the consumption trap.
The Nobel Prize-winning economist is a world-class expert in researching poverty issues. In his book on the nature of poverty, he tells the story of a character named Parker. Parker is an ordinary farmer living in Indonesia; his family is very poor, and sometimes he can only eat one meal every two days. As a result, Parker's body is extremely weak, and he doesn't even have the strength to work or earn money. To ease the burden on his family, his children have to drop out of school to work or be sent back to their grandparents. However, when visiting Parker's home, he was shocked by what he saw: a TV, a video player, and a mobile phone in the corner. There was also a little tea and coffee. He was confused. Why doesn't Parker try to fill his always empty stomach before spending money on such expensive and currently not very beneficial items? Parker told him, "I need to have some joy for myself." He advised Parker that he could save money for health or for his children's education, but Parker still didn't listen; whenever he had a little extra money, he would use it to buy things for entertainment. Later, he discovered that Parker was not the only one with such desires.
Most poor people in this land are like that; he eventually concluded that the reason people are poor is not due to income but because of low awareness. Many people are too irrational in their consumption; they do not understand what they need most and never care about the break-even ratio. Therefore, they continuously fall into the consumption trap. The same story does not only happen in the poor country of Indonesia but also around us. Nowadays, more and more people consider enjoyment as their compass and prioritize treating themselves well, so we pursue anything trendy and spend money on anything that follows. Today, I will drink a cup of branded milk tea. Tomorrow, I will buy a new mobile phone from some brand.
In an unconscious way, we have spent all our money without bringing any added value to ourselves. There is a saying that "what truly determines the wealth gap is the level of awareness." The less money you have, the more you need to keep a clear mind. Cherish every amount of money in hand and carefully consider the cost-effectiveness of each expenditure. Spend money where it truly deserves; do not be blindly impulsive; this is the clarity that an adult should have.
People with foresight know how to spend money wisely.
Famous financial planner David Bach once said that the issue of money is often not that you have too little income but that you spend too much. When a person has no money, it is often because their vision is too narrow and they lack long-term spending plans. Only by always reminding oneself to be prepared for a sudden rainy day and forcing oneself to save can one easily cope with various difficulties. There is a lecture like this. The speaker is Sun Ling; she worked in a factory right after graduation and only earned 2000 yuan, about 6.5 million VND a month.
As soon as her female colleagues received their salaries, they would use them for consumption or to prepare dowries, but Sun Ling was different; she did not want to spend her whole life working in a factory. Coincidentally, she began to enjoy learning about computer software. However, the training costs were too high; she could not afford the first class. So after careful consideration, Sun Ling began to save money; she planned her spending tightly, ate very simply at every meal, and stopped buying clothes and jewelry. Before long, she had saved 30,000 yuan, equivalent to about 97 million VND. She used all the money to enroll in classes, and after completing her studies, she found a job as a programmer.
After that, she continued to save money while also investing in herself. First, she improved her skills and learned English, then went to a university in the U.S. to study further. A few years later, with her outstanding abilities, Sun Ling joined an internet company in New York with an income of millions of dollars a year. Meanwhile, her colleagues in the factory remained stuck in a vicious cycle. It was precisely because of spending money in the right places that Sun Ling was able to reverse her fate. Japanese economist Masato Noguchi once proposed the theory of three wallets. He believes that everyone has three wallets used for consumption, investment, and speculation. Consumption is spending money to satisfy personal desires. Speculation means spending money to seek fortune, such as buying lottery tickets, collecting artworks, etc.
Investment is paying part of the cost upfront and then receiving long-term profits, such as spending money to improve oneself and educate children. True masters with foresight know how to combine the three wallets as follows. The best spending principle is "one more, one less, one reasonable." Speculate less, invest more, and consume reasonably. Save when it comes to luxurious and useless things if possible. Spend on things that enrich yourself when you need to; spend your money on valuable things, and you will reap countless rewards in the future.
People with foresight will spend money in the right places.
How a person spends money partly determines the height that person can reach in the future. People can be divided into three levels depending on how they spend money. Those at level one spend money randomly and buy anything they think of. Only pursuing short-term happiness without leaving any reserve fund poses dangers for the future. People at level two can save money and tighten their belts. While they can ensure their livelihood, they miss out on many more experiences and never truly live in the present.
People at level three know how to spend money and can spend it on things that are truly valuable. They let money generate more money, and compound profits continuously increase their value and lead to a richer life with more experiences. Someone once said that wealth is like water in a pond; it circulates every day. What we need to do is make the outflow of money more valuable and cost-effective.
First, spend money on health. Have you ever noticed the health traps around you? Many people only care about making money without paying attention to their physical condition; they wait until small problems become big issues before addressing them. Usually, most of the savings in life are wiped out in one illness. Spending on health early is called investment. Spending late is consumption. When it comes to taking care of our bodies, we should not be stingy; you can set up a health account and regularly deposit money into it for exercise, health check-ups, medical treatment, etc.
Second, spend money on relationships. There is a saying that "if you want to go fast, go alone; if you want to go far, go together." Money is something with wings; only by letting go can you gain more. When you are wealthy, share a part of your large pie. When others are in difficulty, help them; others will remember your kindness and reward you doubly someday in the future. The money you spend on relationships today will become the ladder that helps you advance in the future.
Third, spend money on personal development. Instead of having money, become worth the money; the ability to earn money from investment is more important than earning millions of dollars. In this rapidly changing era, your current special skills may become worthless after a few years. If you want to avoid being eliminated, you must continuously develop your abilities; only by constantly improving yourself, learning, and updating knowledge and skills can your value and income increase.
Someone once said that a person's understanding of money will affect their choices and ultimately determine their fate. Wherever your money and time go, your life will go there; blind consumption can only satisfy vanity and temporary boredom. With a reasonable plan, smart investments, and spending money in the right places, you can continuously reap surprises and growth.