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Forget about ‘don’t do this, don’t do that’. It’s time to have your cake and eat it, writes Mapalo Makhu
Usually, when you go through money columns and articles, the advice is mostly based on “don’t do this, don’t do that”.
And, although most times it is with good reason and good intention, this type of advice doesn’t help.
It also does not inspire most people to move closer to good financial habits, because they feel it is limiting.
And, when you can’t tick off all the dos and don’ts, you end up feeling overwhelmed and perhaps like a failure.
And nobody wants to feel like a failure.
I want to let you know that you can earn your money and enjoy it at the same time. Yes. Have your cake and eat it.
Okay, first you have to start with the basics. And that is budgeting.
When done right, a budget allows you to take control of your life and enjoy the things that matter most to you.
A budget is not just a collection of numbers you look at only at the beginning of the year. A budget essentially is like a map, showing you where your money goes. It gives every rand a purpose.
Budgeting should be simple, nothing complicated. It shows you what you earn and what you spend.
People complicate it by taking on expenses that don’t make them happy or add value to their lives.
For example: if I joined the gym but I detest working out, it is an expense I have added to my budget. First, I don’t like gym and, second, I am now paying for it.
Many people get trapped in this; they have expense items that don’t bring them any joy.
I know some of you are thinking I’m over simplifying personal finance. But is it not simple? Spend less than you make, save and invest, enjoy the rest?
A big part of budgeting or, rather, the “secret” to budgeting, is automation. How many times have you said to yourself, “This month, after all my expenses, I will save some money”, but never do?
Here is what you can do to start enjoying your money.
AUTOMATE, AUTOMATE, AUTOMATE
1. When you automate you take off the pressure to remember what needs to be paid and when, whether it is paying your credit card or growing your emergency fund. Simplify your financial life by automating your payments; this is a simple exercise that can be done on your online banking.
PAY YOURSELF FIRST
2. Paying yourself first is acknowledging your efforts and putting money away for yourself. It is rewarding yourself and allowing yourself to be “selfish” with what you earn by saving and investing. Most people never seem to save or to invest because it’s the last thing on their list.
If you were to treat your savings or investing as a fixed expense, you would always pay yourself first.
You can start off with any amount; it doesn’t have to be huge sums of money. Just commit to either a fixed amount or a percentage of your earnings (especially if you are a freelancer). Paying yourself first is a good way to build healthy financial habits.
BUY YOURSELF EXPERIENCES, NOT THINGS
3. You’ve probably heard this one before, but it is true. It has been proved scientifically that buying more things doesn’t necessarily bring more joy as, over time, they don’t bring us the same pleasure they once did. Experiences, on the other hand, are varied and never grow old. And, in most cases, we enjoy experiences with other people, bringing contentment.
DEVELOP AN INTEREST IN PERSONAL FINANCE
4. I often talk to people who say they are bad with money. But, of course, people would think that – no one teaches you from a young age how to manage money and how it works.
But I often ask them if they were always good at their job when they first started. The answer is almost always no.
So why do people feel so bad when they haven’t learnt the skills to manage their finances? I want to highlight this again: It is a skill anyone can learn.
Start by learning one concept every month. For example, in February learn about what makes a budget work; in March learn about your pension or provident fund – and build from there.
By the end of the year your personal finance knowledge will have grown and so will your confidence about money.
Educate yourself. Yes, educate yourself. There are so many resources available at your fingertips.
No matter where you are in your financial life – perhaps you are just starting to dig yourself out of debt, just starting to save, at the beginner’s stage of investing or are well on your way to creating wealth – enjoying your money is essential.
When you start thinking about personal finance as fun and not as a burden, you will realise that you can enjoy managing your money.
Mapalo Makhu is a financial planner and personal finance coach
