In my introductory column early last month, I mentioned that I chose financial literacy as one of my empowerment topics because of the basic knowledge that I learnt about finances when I worked at Absa. I also confessed that I do not claim to be an expert in financial management topics, but I am sharing my experience with money as well as the mistakes and lessons that I learnt over the last twenty-odd years.
Even with the basic information that I learnt while at Absa, this still did not stop me from making careless mistakes when it comes to handling money. The fact that I came from humble beginnings was one of the main reasons why I handled money so badly. Because I grew up not having much, I used education to get me out of my situation. I was lucky enough to be employed in conglomerates that allowed me – over time – to earn a descent amount of money.
But we all know – that money is never enough especially when you are misusing it.
Instead of thinking about saving for my future, the first thing I did was to justify my spending patterns to myself. I told myself that I worked too hard to be where I was – not to reward myself. Not forgetting black tax in that equation as well. There was absolutely nothing wrong though with me rewarding myself; the only problem is that I exaggerated the personal rewards. I might have gradually started earning well but because I overspent, I found myself living from hand-to-mouth on a monthly basis.
When I started my PR business at the end of 2012, I learnt some hard lessons about overspending, accumulating too much unnecessary debt when I had no steady salary anymore. I had to learn very fast about tightening my belt and stretching the rand until the next payment. In conversations with other black professionals who were now also in good positions at work but came from humble beginnings – I picked up that there were a few of us that spent a lot because we felt we deserved it – until we got ourselves into tight corners that we were now struggling to get out of.
So, in hindsight, if I had I known better I would have followed the principle that applies to both personal and business finances – the 50/30/20 rule. I would have saved 20% of my salary or used it to pay off debt, used 50% of it to pay my fixed monthly expenses and used 30% for my wants. If I had done that 21 years ago when I started my first job, I would be sitting in a better financial position today.
The lesson to derive from here especially those that are still in their youthful years is to make better choices when it comes to money and know that saving at an early stage – no matter how little it is per month goes a long way in securing the #SoftLife that we are all chasing in the future. Next week, we will yet again take a look at another topic under the empowerment theme – PR-related issues. The main focus will be on the “Challenges faced by PR professionals in the midst of COVID-19.”
