Act your wage

I am so fired up right now I could compete in a bull run in Mexico and run that first bull down no question. Why? I want to share something with you, and if you are guilty of this, and it sounds like I’m preaching, it’s because it’s something I feel passionate about and I am… preaching, because you’re guilty of it! So, get your house in order! Stop it!

I had coke and biscuits (don’t judge… it is just too hot for tea this time of the year in Durban) with a friend and she shared with me how they are struggling to get out of debt. She and her husband both have two credit cards, an overdraft facility and both still owe massive amounts on their cars. I had to think twice at first because I felt like I have heard this complaint from her before.

“Didn’t you have the same problem two years ago,” I asked, trying not to look surprised/shocked/terrified!

“Yes,” she said, “we just seem to remain stuck in this cycle.”

“Have you made any chances to your life-style?” I tried.

Then, “Do you have a REALSTIC budget?”

Next, “Where did you cut expenses or where did you earn extra income?”

All of which got me the Bambi in the headlights face… “Huh?”

“Come now, we had this discussion,” I reminded her. “You have to work at it. It is almost the same as losing weight, if you don’t take action the fat is not going to disappear. You are not going to wake up one morning and be 5kg lighter. It needs some hard work. You need to cut portions. You need to exercise. You need to pack a lunch so that you don’t grab the chips in the vending machine because you feel like Tom chasing after Jerry.”

Money-matters work in exactly the same way. I am not good at maths is usually the lame excuse. Let me help you out today, dear friend. Total income less total expenses = Surplus or Deficit. It really is as easy as that! If you don’t cut expenses or you don’t raise your income, the math is not going to add up.

I have mentioned many times that the Dave Ramsey 7- Baby Steps plan is a great framework to start with. You don’t have to become as radical as to put money into envelopes but if that is going to ensure you remain focused then yes, please, put it in an envelope or a shoebox or whatever you need!

I have a friend who put a picture on her bedside cabinet of what she wanted to look like after she lost 12kg! That was her motivator every morning when she started to negotiate with herself why she shouldn’t go for that run.

Start with a REALSTIC budget. There is no point in setting up a budget if you can’t stick to it. Cut expenses that you can live without. This should not include insurance or retirement payments by the way! This should include items like gym fees, luxury food stuffs, bottled water, entertainment, etc (see my other post on 10 easy ways to save money this year).

Act your wage! If you don’t earn enough then don’t buy that car or that dress of whatever else it is you “need” to give you some short-lived satisfaction.  Trust me, the Joneses probably have more debt than you have but if they don’t then good for them… there is no first prize for seeing who can get to debt-counselling first. 

Make sure you track your expenses - envelopes, free accounting software, colour code your bank statements - whatever you need to do to make sure you can account for where your money has gone at the end of the month.

Tackle the least amount of debt first and pay it off. Ok, those who can do math don’t argue now about interest rates etc. The discipline needs to be established here! We just want to get the momentum going. Snow-ball affect.

There are millions of ways you can start to become debt-free and establish a healthier relationship with your money. The Dave Ramsey plan is just one of many and I can truly recommend it because we have tried and tested it and it worked for us! Search for the Dave Ramsey 7 – Baby Steps plan in Pinterest or Google and you will get tonnes of literature on it (for free).

No matter what recipe you follow, just work at it. Make sure that in two year’s time you can complain about something else and please, my dear friend, may it not be that you are still stuck in debt!

Let’s hope this inspires you to grab the proverbial Mexican holiday bull by the horns and run with it!