Money can be a pretty sweet deal; it can provide you with an exciting lifestyle, glorious things, and sometimes a little happiness. The catch? Sometimes there isn’t enough money to go around – and since there are no trees growing free cash, no currency bills raining from the sky into our purses and wallets, most people live in a world of budgets.
My all-time favourite quote is by James W. Frick, “Don’t tell me where your priorities are. Show me where you spend your money and I will tell you what they are.” There are a lot of ways you can make your money work for you. With the right systems, you can save and invest for your future. Doing so will build a solid foundation for your personal and possibly family finances.
I hope you didn’t break your bank account for the last x’mas holidays and even if you did, the following steps will help achieve a modest financial breakthrough in the year 2020.
First step: Go through your account statements. Compile the list of all your debts including their frequency of payment, repayment amount and interest charges if any – you can create an Excel sheet for that or use an ordinary exercise book to do same. Stop right now and do this:
- Name of Debt-Holder, Balance Outstanding, Interest Rate, Frequency of payment
If your total debt number seems high, remember two things:
- There is a large group of people with more debt than you.
- From this day, that number is only going to go down. This is the beginning of the end.
The next logical step in your order of business is to get rid of it. Your money can only work for you once you’re out of debt. You can’t properly invest in yourself or your future if you have a mountain of debt that you haven’t addressed yet. From my personal experience, getting out of debt isn’t easy — especially if you have no money, no assets, and no idea how to start but it’s possible. Once you know exactly how much you owe, you’re ready to strategically attack your debt. To get out of debt the absolute fastest, you’re going to want to pay off the loan with the highest interest rate first.
Whilst at it, avoid raising new or additional debts – basically freeze your quest for loans and go into negotiations with your creditors on some write-offs and or a cap on interest charges and penalties.
Have a frank discussion with your spouse and possibly a few of your trusted family members on your current situation – this will not only shape your journey to recovery but also prevent them from pushing you into additional debts.
Written by:
Charles Mensah
(FCMA, CGMA, MBA)
Managing Partner, Trust Consult Limited
Management Accountants & Consultants
Source: Glitz Africa Magazine issue 25
