How to eliminate financial scarcity

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Inflation is more than 9%, that is, the thing that is 100 rupees this year will be more than 109 rupees next year. Income is decreasing and expenses are increasing. World economic recession and famine may be coming. Going around a lot, buying expensive clothes often, eating in restaurants regularly should be reduced. The unnecessary expenses which can be avoided should be eliminated.

Income can be divided into three parts. One. 50% of household expenses, two. 20% emergency expenses outside the family, three. 30% savings and investment without bank deposit. I will explain number three later.

Speaking from experience, extra unnecessary expenses will get you into a lot of trouble. Although not a financial problem, excessive spending habits can lead to psychological problems in the long run. For several years I have been getting 15-25 thousand taka per month on my credit card just for restaurant bills. Those who walk with me know. I understand how bad this habit is.

Now I follow a policy. If there is a chance of creating a new sector of my expenses, I try to create an extra source of income for those expenses. If not, avoid that cost. Spending on something new from existing income is foolish. Many people tell me why not buy a car? A car means spending lakhs of rupees a month. It is logical to buy a car after making an extra lakh rupees income for those expenses, otherwise a car and an elephant are one thing.

I was talking about savings and investment. The highest bank interest in Bangladesh is 7%, and inflation is 9%. That is, what the bank will give you is less than the increase in the value of things. So try to invest. Halal and profit is sure to be few % more than inflation. Saving money reduces at the end of the day.