Jennifer (25) is forever at her local ATM, drawing money. She drew R1 000 on Thursday, another R500 on Friday and another R1 000 on Saturday. At the end of the month, Jennifer is apt to say, “Where did my money go?” Where, indeed?
If this sounds like you, you may need to take a long, hard look at what your money means to you. Yes, it is your money to do with as you wish. You earned it. We associate money with personal freedom because it is ours: we are money owners. But with ownership comes responsibility — as any homeowner will tell you.
Financial coach Linda Smith says that her workshops are full of people who suffer from “ATM syndrome” — having such easy access to one’s money makes one feel empowered. But one is far more empowered knowing how that money will be spent. “It’s always better to draw for something,” says Smith. “If you have a goal and a predetermined budget, you will know exactly where your money goes.”
Own your money
Accountability is a big part of financial planning. You answer only to yourself, so you need to make some responsible choices. Would you take company money, purchase something and then go back to the office and say, “I think there’s some change here … hang on … where did it go?” As a professional, you wouldn’t dream of it — so why would you manage your own money in such a cavalier fashion? You are your own boss, so respect yourself and your hard-earned money.
“When we hold ourselves to financial account, we often find that we’re empowered in other ways, too,” says Smith. “We realise, for example, that if we can say ‘no’ to a new pair of shoes we can also say ‘no’ to someone taking advantage of us.”
The importance of having a goal and a means to achieving it cannot be underestimated, says Smith. “Finding a way to make your money work for you — not looking at deprivation but at the challenge of coming out on a budget — is incredibly empowering. You also find you are extremely grateful for even small things you allow yourself. You gain a sense of perspective. Maybe you can’t take your children to the cinema now, but you can plan to take them at the end of the month and you can all look forward to it.”
Age-appropriate accountability
Smith points to another challenge that is actually lots of fun — showing your children how to work with money. “One of my clients has a whiteboard on which she writes up all her grocery expenses,” Smith says. “Her kids don’t just assume she can go to the ATM for more money whenever she feels like it. They know there’s a household budget, they know groceries cost money and that one has to save to enjoy some things.”
Empowering children at an early age means they won’t grow up thinking, “Mom and dad magically made a plan.” They can see the plan in action.
There is no need to burden them with too much information — just the rudiments of financial literacy. They then become accountable in the sense that they view money as something that must be made to work for one.
“If you hold yourself to account, you hold others to account, too,” says Smith. “It’s about mutual respect. Not letting others off the hook if they owe you money is also a form of accountability.”
Linda’s tips:
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