Finances, or lack thereof, are probably one of the biggest causes of anxiety, stress and a sense of hopelessness. Financial worry is a precursor to depression and in severe cases even suicide. While the saying goes that money does not buy happiness, lack of it can cause lots of tears.
Aim to be in a position where you control your finances, and not have your finances control you. If you are one of those that is having sleepless nights about your financial situation, all is not lost, take the decision now to make changes and aspire to have a healthy relationship with money. Through self-limiting beliefs and habits, we are often our own worst enemy.
A personal testimony
I have had my fair share of financial stress. As a single mom, it was not easy to meet the obligations meant for a two-parent household. Coupled with that I was a text book case of how not to manage money. Irresponsible choices, a sense of entitlement, emotional purchases, guilt, you name it. Delayed gratification…what was that?! Of course, I can look back now and see all the errors of my ways, in the midst of it, you can justify anything.
It is not a great place to be in. I still get flashbacks and to this day the thought of finances fills me with dread. I feel like Scar from Lion King when he hears the word Mafaso. (Involuntary shudder) That fear that grips you, the dread to answer the phone, the shame, embarrassment, guilt. I felt like such a fool.
8 Causes of financial strain
- Misguided values and beliefs
- Bad habits
- Reckless spending
- Lack of discipline
- Poor planning and budgeting
- Unexpected costs
While some of these are beyond our control, most of them aren’t.
Financial beliefs and values
It is too broad a topic to get into values and beliefs here, but both impact our thoughts and how we manage our careers and finances. They are ingrained in us from an early age. It is important to know and understand how we think so that we can identify and adjust any wrong thinking. For example, a common trap is that of believing we have to keep up with the Jones’s because our self-worth is entrenched in our status and financial position in the world.
It is believed that often, children from wealthy families, will be financially successful in life. This is not only because they have more opportunities and security, but also because they believe they can be wealthy. They have grown up with wealth and see it as achievable. Conversely, children from poorer families, see wealth as unattainable and something that is only for others. They don’t believe in themselves and that they can be financially successful. It is known as a poverty mentality.
According to briantracy.com, the 5 most common reasons for not being wealthy are:
- Don’t believe we can be wealthy or that we aren’t wealthy (self-limiting belief)
- Don’t make a firm decision to become wealthy (plan)
- Procrastination (remember this one 😉 ) If not, you can read the post on Procrastination here.
- Inability to delay gratification
- Long-term perspective. (Thinking and planning well in advance)
Do you recognize any of these in your own life?
What does having wealth mean to you?
When setting goals for future saving and spending, how do you decide how much is enough? There is a well-known quote by Rockefeller, one of the world’s richest men, when asked this question. He responded “Just a little bit more.” Well, that’s not too encouraging for most of us, it seems we will never have enough. No wonder so many people are exhausted trying to work harder, earn more and buy more.
If you see your value in wealth and material things, then you stand the risk of living above your means to feel good. You will constantly be striving for more and will never be satisfied because material worth is fleeting. If this sounds like you, look deep into your heart my friend.
Ignore what you see on the internet or what your neighbor has got. Set short, medium and long-term goals and determine what you need for yourself in order to achieve your financial goals. Then you can plan how to reach those goals. Failing that, we live month to month, ‘living the dream’ without the means and that can lead to trouble.
There is nothing wrong with wanting a better life as long as it is not an obsession driven by the wrong motives.
How much is enough?
If you have spare clothes in your cupboard, food to eat and a few coins in your purse, you are richer than most of the population on earth. In fact, if you earn more than the equivalent of $32 400 a year, you fall within the world’s top 1% earners. Scary when you consider how many people in this bracket are in debt. Even a reasonable income doesn’t guarantee financial stability. The more we have the more we think we need.
I read a statistic, which said that if you are a domestic servant in South Africa, you are among the top 25% richest people in the world. That is frightening considering domestic workers in SA are among the lowest paid workers and barely eek out a living. It certainly is not a comfortable wage to be living on.
We usually inherit our financial habits, it’s a case of we do as we see but it is also never too late to become money savvy. Equip yourself with knowledge by reading financial sites and journals. There is loads of good advice on personal finance which can help you get your affairs in order. Start implementing a few good habits.
- Don’t buy on credit if you can’t afford it. Delay gratification. If you don’t have the money today, chances are you won’t have it next month. We tell ourselves, next month will be better, but maybe it won’t be or something unexpected could pop up.
- Have a financial plan and budget and stick to it.
- Don’t ignore debt and hope it will disappear. It won’t. Face your fears and talk to somebody if you are stuck. They usually are willing to help and devise an affordable repayment plan.
- If you know you tend to make hasty decisions, find somebody to be accountable to.
- Seek wise investment advice on how to save and prepare for the future. Think of investments plans for your kids future. Have a savings account and emergency fund for life’s little curve balls.
- Don’t live beyond your means during the good times, they may not last. We live in uncertain times.
Planning and budgeting
This is so crucial, I cannot say enough about it. There are some great budgeting tools and apps available. Keep those financial wells filled in preparation for the times of drought and if you do not have a financial plan, now is the time to start.
If you would like a little more information on goal setting, take a look at this blog post here.
Job loss and unemployment
There are, of course, those things that can happen which are beyond our control. Retrenchment is a reality and even qualified, experienced people are facing long periods of unemployment. If you are faced with this situation, you don’t want to be facing massive debt as well. Avoid running up debt during the good times and ensure you have a buffer in case of unexpected crises.
Depression caused by loss of work and subsequent loss of self-esteem can lead to even greater problems. Depressed people tend to spend more. This only compounds the problem resulting in more debt and guilt.
Our choice of career is also dependent on our values and beliefs. If these are not in line with who we are, we end up burned out and stressed because we are forced into something that is difficult for us to do.
With so much job insecurity and unemployment, the future is looking bleak for many people. Sometimes careful money management and planning are not enough as an unexpected crisis can hit and leave us in a dire financial situation. Even though some things are out of our control, it should not be an excuse not to prepare. The belief that you can’t do anything will lead to inactivity and guaranteed disaster. With careful consideration, you can cushion yourself and at least minimize, if not prevent it.
Sharpen your skills, stay up to date and always give your best so that you have value within a company. It will reduce your risk when there is restructuring.
The job market is changing. Look to the future and what skills will be needed down the line. Many jobs and businesses that were so successful in the past are now obsolete.
It may be necessary to consider a second source of income. Look for opportunities and put in the effort.
God’s economy is very different from that of the world. God does bless His people with money, but money can become an idol to us and source of ruin, which is why we have to be so careful. Solomon was one of the richest men in the world as well as one of the wisest. At the end of his life, he admits that material wealth is fleeting and only a true relationship with God gives meaning and purpose.
The Bible says if you are faithful with little, much will be given (Mathew 25:21) Manage your money well, and you will reap the rewards.
Friends, I implore you to take control of your finances today, if you haven’t already. Whether you are single or married, plan your finances. I have recently read articles that suggest we are heading for another global economic crisis. Don’t take this as sound economic advice or a prediction, but it does no harm to be prepared.
There is a section on finances in the checkmeout_2018 challenge, so if you haven’t already, here are the questions to fill out. To find out more about The Checkmeout Challenge, take a look at the blog post here.
checkmeout_2018 Financial Questions
Checkmeout 2018 Financial explanation
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