Putting true value in money

I ATTENDED a two-day course on cost benefit analysis recently where I learnt the basics of financial management, especially capital spending. Knowledge of financial management is not only significant for working purposes but also in managing our personal finances.

Everyone is a customer who is paying to consume a product or service. But do we reflect on what we purchase and how it would benefit others?

People around us could live well and share the value if we are smart in spending money. This is called “value for money”. It is not solely measured on the financial outcomes but also on how the resources are equally shared without any wastage.

For instance, you buy nasi lemak for yourself and family but only you and your wife end up eating it because your children want fried mee instead. Thus, it would have been better if you had bought both nasi lemak and fried mee so everyone could enjoy the food and there would be no wastage.

If you want to buy gifts for your children, get them something which they could use with their friends. For instance, buy a soccer ball or badminton racquet rather than an electronic gadget. The sports equipment will enable your children to spend time with their friends.

The main components of value for money are the three Es – Economy, Efficiency and Effectiveness. Value for money depends on your ultimate goal.

There are lots of benefits you could acquire if you spend in an effective way. These benefits might not be tangible in nature but may come in other forms such as good health, nice environment and security.

Besides, doing a thorough assessment before deciding to buy a product or service could enhance your critical and analytical thinking too.

Making a wise decision is essential to ensure others also benefit from what we purchase. So, think wisely and do some research before spending. Remember, “people do not plan to fail but they fail to plan”. Value each sen of your spending for a sustainable life. SS Klang