Avoid Discretionary Spending Amid Rising Prices – Financial Analyst Advises

Financial Analyst, Nelson Cudjoe Kuagbedzi, has urged households to adopt strict financial discipline and avoid unnecessary spending as rising prices continue to mount.

Speaking on Business Breakfast on Zed with Nii Trebi Hammond, Mr. Kuagbedzi cautioned that with the likelihood of rising prices, individuals and families must prioritise essential expenses and adhere closely to their budgets to avoid financial distress.

“This is the time to avoid what you call discretionary spending. If you foresee inflation going up, then you have to make sure that you stick to whatever plan or budget you have,” he stated.

He warned that failure to control spending habits could quickly deplete incomes, forcing households to resort to borrowing, an outcome he described as potentially worsening already strained financial situations.

According to him, effective planning is crucial, especially in an economic environment where prices are expected to rise while incomes remain largely unchanged.

He stressed that households must consciously align their spending with their earnings and focus on essential needs.

“If you continue to spend just like that, your income will get finished and you will have to go and borrow. And that may even worsen your case,” he explained.

Mr. Kuagbedzi further highlighted the importance of understanding one’s spending cycle, advising that non-essential expenditures should be postponed or eliminated entirely when not immediately necessary.
“It is always appropriate that if an expenditure is not needed at a particular point in time, you try to avoid it,” he noted.

Touching on changing lifestyle dynamics, he acknowledged that certain items previously considered luxuries are now becoming necessities due to evolving socio-economic conditions. He cited car ownership as an example, noting that increasing traffic congestion in urban centres has made it more of a necessity than a luxury for many.

Mr. Kuagbedzi emphasised that financial decisions ultimately depend on individual priorities and preferences, urging households to make informed choices that align with their financial capacity.

The financial expert reiterated the need for prudent financial management, encouraging Ghanaians to remain disciplined in their spending to withstand the impact of rising living costs.