REVIEW: Get your money right - 4 financial lessons learnt from a financial bunny
With an already strained economy and a global pandemic that has wiped away sources of income for countless people in South Africa, perhaps it’s time we admit many of us actually don’t know what we’re doing, and we need help.
When I think about the relationship most people I know have with money, a popular song by US soul group The O’Jays comes to mind.
The opening lyrics go a little something like this:
“Some people got to have it
Some people really need it
Listen to me why' all, do things, do things, do bad things with it
You want to do things, do things, do things, good things with it."
Most of us really want to do good things with it. We want to save, invest for the future, buy things that’ll make our lives comfortable and, of course, enjoy it. But many either never get a good start or somewhere along the line lose their grip on trying to handle finances the right way.
With an already strained economy, and a global pandemic that has wiped away sources of income for countless people in South Africa, perhaps it’s time we admit many of us actually don’t know what we’re doing, and we need help - which is what I found in 379 pages of a book by personal financial bunny, Nicolette Mashile.
Titled What's Your Move? A Collection of Ordinary Financial Lessons, the book was written to encourage more people to take their finances seriously and not be intimidated by money.
Each chapter draws from one of the many lessons Mashile has learnt over the years – many of which, as a young black woman, I could relate to.
Here are four key lessons I learned:
1. I don’t know half as much about proper financial management as I thought I did
From a young age, I’ve always been fairly responsible with money. I had a kiddies bank account long before I knew the real value of money and learned the reward that comes with saving money for later use. But in terms of knowing how to navigate adult life and my money, well, I’ve come up a bit short.
Like many people who start work after tertiary, I knew next to nothing about taxes, pension funds, bank accounts, savings and investment. Nearly a decade since I’ve kind of been winging it and have been lucky enough not to make and life-alerting mistakes that I’ll regret for years to come. I need to go back and relook my spending, the terms and conditions of my pension fund, know exactly how much tax I pay and how it changes with salary increases etc. Time to get Googling and calculating.
2. I need to diversify my investments and know that investing now may mean only my kids will enjoy the rewards
Invest, invest, invest! Sure, this is one money habit we’re told we must master as early as possible if we really want to create lasting wealth, but no one tells you it’s not that easy.
Chapter 7 of the book tackles how diversifying investments, i.e not just having one type of investment ensures you lower your risks and maximise your returns’ potential. Not all investments are designed to bring returns in a few years, however. With ones that take longer, these may outlive you and only benefit your children. Which is not a bad thing in itself.
3. The earlier you get saving for your child, the better
My daughter turns a year-old next month and with the coronavirus nowhere near disappearing, we have opted not to have a birthday party for her. So, with the money we would have used for a party, we’re now going to open an investment account that we will be regularly contributing to, with the plan that she can access it when she’s 18.
What she chooses to do with the money by then will be up to her, but if we’re to ensure she doesn’t suffer some of the same challenges her dad and I went through post-high school, the best start we can give her is the safety of finances she can fall back on while she focuses on her studies or work.
4. Getting out of debt doesn’t have to be complicated
While debt is considered a helpful tool in access things that we normally would not be able to with cash, being debt-free is something I think most of us would like to see ourselves becoming.
Where we tend to get stuck (and sometimes give up) is when we look at how much debt we have and how long it could take for us to get rid of it all. But, with an aggressive strategy that fits your lifestyle, it doesn’t have to be complicated.
In the book, Mashile details various practices one can adopt to tackle their debt. Whether it be cutting down on unnecessary expenses, denying yourself of certain luxuries for a while, adding an additional income stream to service the debt, or even negotiating with creditors – there is a way out. Find it. Put it into practice and stick with it.
If you’re one of the few lucky people who have their money game figured out and don’t have much to complain about with regards to how much you earn, where your money goes and the future of your financial security, then perhaps you’re not the target market for What’s Your Move? and may find that many of the lessons in it are ones you learned long ago.
But, if you’re like millions of the rest of South Africans with some form of income who want to get their (often messy) finances in order – especially in the midst of economic hardship in the country – this may speak to you in the simplest way, bar a lot of the confusing jargon thrown around in financial education. You may learn a thing or two from the many lessons contained in it.