Spend management is for individuals and professionals. Economic downturn or not, spend management gives an individual a greater control and oversight over the use of resources so that these resources can be used for a more carefully thought of growth in wealth or a save option for the future.
Proactive cost control is another word for spend management used by finance professionals in corporate sector. A unique concept knowingly or UN-knowingly used by everyone. In corporate sector, we talk about cost control to maintain bottom line with-in set parameters however it is more interesting to know that 'proactive cost control' or 'spending management' makes the living of individuals relaxed.
In a layman term , the phrase used is 'spending money wisely'. This is not to be confused with 'Investment'. Spending money on luxury, long term needs and clearing long awaited to-do list.
Saving and investing is good practice but then as we know that everything has a limit, investment also has a limit. Over investment and less spending on self in not a good option for anyone. However, carefully using money and prolonging few needs is spend management.
An example based on my experience; We had a daily housekeeper who used to come to work daily on a motorbike. The old bike was however in a good condition, except the torn seat that needed replacement. The housekeeper looking for surplus money to replace seat.
Interestingly I noticed that daily she carried a bottle of coke to work and sipped it almost the entire work time. This is what she liked sipping on the coke and working. The cost of replacing the seat cover was around 200 Baht. If she could have changed her daily routine of drinking the chilled coke to alternative day, then she would save over 15 baht each day and by doing so she could save enough in a month to change the seat and hence driving comfortably and feel happy.
In this sequence, she was only thinking about having extra 200 baht to replace the seat of bike but not changing habit that could have served the purpose.
Fulfilling your need by earning extra money is not option but a distraction....
The above example shows that the housekeeper was not interested in changing the spend pattern that could’ve make life easier. Just earning extra bucks is not the only option but to manage spending is better solution.
An individual can let go his not-very important activity or purchase for certain period of time and to replace it with what is more important for that point of time to make life slightly better.
Changing habits and using money & resources for different use makes life easier and happier. Its not saving and investing but change in spend-pattern which is not difficult but slightly tactful.
We come across individuals who use best of gadgets and are spending higher on lifestyle whereas few other with higher earning struggling to manage expenses is the quick example of 'spend management'. Using Mercedes Benz does not mean that someone have 'deep pockets' it is his 'spend management' skill, making him enjoying more things with similar earnings.
Good luck in reviewing your spending pattern and making wise decisions ....
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