There comes a time in every working person’s life when you have to take a good, hard look at your financial situation…and scream. Then you need to figure out a way to fix it. So here’s a plan to get you thinking about new ways of bringing your money in line with your dreams, by acting as your very own financial planner
I’m well known for buying unnecessary things. A spare car. Too much underwear. Hardcover versions of the softcover Terry Pratchett books I already own. From the extra extras to the pricy options, I’ve lived my life like there’s no tomorrow.
My favourite hero is The Loan Arranger and his horse, High Hopes of Silver. The litany of bad life choices and poor financial planning that is the motif of my life reads like a tragedy in 43 parts. So, it’s no surprise that I approach a new year with some trepidation, wondering how my modus operandi and a shaky economy will set the tone for the 12 months ahead.
Listen, listen – it’s all quite simple, really – being forced to take loans, extend overdrafts and be super friendly to well-heeled family members is NOT financial planning.
Here’s what’s changing for me in 2018:
No car. Nope. Here in Dubai, I live close enough to the office that I can walk. If I need to go somewhere further out, I cab there. Or if it’s a weekend adventure, I hire a car. My cab and car hire costs are a fraction of what it would cost to own a car. Just think – there’s the monthly instalment, the loan interest, fuel, fines (because they happen), insurance and parking. Seriously – have you worked out how much you spend on parking every month? It’s like paying rent on a place to store a car you hardly use. In fact, that’s exactly what it is. And that ridiculously overpriced Audi back home in SA? I’m selling that, as soon as I can.
Shutting down unnecessary bank accounts. When I moved to Dubai, I had a small windfall from my old job. Old me would have spent that on all sorts of ephemeral and fleeting pleasures. New me settled my credit card, paid off my overdraft, and shut down both accounts, as well as closing my savings account because all that was accumulating was dust and bank charges. Score one for me. Or rather, score a couple of thousand in interest on credit and bank charges. Why make the banks rich if you’re not rich yourself? It’s madness.
Buying only what I will use. When I left home years ago, one way of feeling like an independent adult was having a fridge filled with all the delicious indulgences I felt adult me was entitled to. I used to scoff at the scrimp-‘n-save manner my mother used to fill the family fridge when I was growing up. The truth is every month I ended up throwing out so much spoiled, uneaten food – a complete and utter waste of food and money. In 2017, I changed the way I did my shopping and it’s worked so well I’m taking that strategy forward into 2018.
I plan my 21 meals for the week ahead and I only buy enough to make those meals. No waste. No overspending. But it’s not like I live a Spartan life of deprivation – I still have nice things and chocolaty indulgences, just like before. The rule is this, though: I only buy a small piece to enjoy right now. I don’t buy luxuries, sweets, or expensive cheeses in bulk to store and eventually throw away. It’s good for my budget and good for my health. Winning.
Saving money. Earlier I told you I closed my savings account. Yes. I did. Because my bank back home was charging me a monthly fee to run that account, eating into whatever tiny amounts were in that account. I’ve done some research and found a bank that offers a fee-free savings account. So now each month I send a little money into that account. No fees. No loss. And because I have a little more money freed up thanks to not having to pay a credit card and overdraft, that means I can actually put away a tidy sum every month.
Here’s the thing about saving money, though. You can overdo it, and cut things so fine saving for that rainy day that you start to resent your life. Why can’t you have nice things, you demand? And then one day, feeling emotional or lonely or hungry or whatever has triggered you – you plunder your savings in a catastrophic spending spree that decimates any decent savings you’ve made. Less than ideal.
So, my plan is this: put away a small sum each month. The same amount. Religiously. And leave enough living money for me to pay my expenses and still have a good life, going out with friends and being able to buy the things I need. And when the next payday rolls around, anything I haven’t spent from last month’s living money I send to my savings account.
It’s not fool proof, and it’s not a one-size-fits-all solution – but it’s far better than anything I have ever done before. Could 2018 be the year I finally do the adult thing properly? Maybe. Let’s not rush to any dramatic conclusions.
Let’s just call it a great start…
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