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Personal Finance: Skip the Lottery and Take Charge of Your Finances

Provided by the International Finance Corporation


It is important to remember that there are only two ways to make your financial situation better.  You can either increase your income or decrease your expenses.  And by making a concerted effort to do both at the same time, you can heighten your chances of improving your financial status.  However, many people believe there is a third way. 

This third way is not a tried and true path but more of a gamblers’ dream  It involves waiting to win the lottery, receive an inheritance, or marry a rich man.  However, even if you inherit a great deal of money, you may spend it in short order if you don't invest it wisely.  With money that was received with little effort, you may take risks that you’d never take with your own hard-earned money.  Additionally, you may be inclined to share the wealth by providing loans and other economic assistance to your family and friends. Before you know it, you have become their private bank, without interest charges or penalties for non-payment.

So if actual windfalls are few and far between, why do so many people seek these external solutions to their money woes?  Because this solution does not involve any accountability or effort on the part of the person wanting to improve their financial situation.  They don’t need to make sacrifices by reducing their expenditures or working more hours to increase their income or continuing their education to get a higher degree.  The problem is that by waiting for someone or something to save them, they might be waiting forever.   

In reality you have more chance of contracting a flesh eating bacterial virus than winning the lottery.  Not to mention the cost of continually buying lottery tickets.  If you buy them daily, how much do you spend in a week, a month or a year?  This money was effectively spent on a dream and not anything concrete.  While money spent on food is eaten and money spent on clothes is worn; money spent on lottery tickets is gone without a promised return. 

The only guaranteed solution to improve your financial situation is to become proactive and do the hard work that is necessary to either make more money or cut back on your spending.  The promise of an inheritance, a salary bonus or a knight in shining armor coming to the rescue, is just that… a promise and not a guarantee.   

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