Finances are an integral part of our lives. We need to understand the value of money so we can have a healthy relationship with it. How a person values money shows on how they handle and react to it with regards to their salaries, bonuses, income tax refunds and payouts from investments. Most of us grow up with the mentality of getting rich and having a comfortable life. We all know how expensive good life is, let alone great life and we understand that for affordability we need to have a lot of money. Majority of our parents never taught us the value of money, we just knew they worked hard to get the little they had and schools do not teach us to value money. If you don’t value something you can never see the relevance of using it wisely.

We need to change all that, empowering yourself financially will allow you to also empower your kids from the very early stage and affording them and our country the next generation that is financially equipped. We sometimes do not care about affordability, we just want what we want without careful consideration. Drowning in debt can be easily achieved by anyone who doesn’t value every cent that comes their way. Women must start believing in themselves rather than hoping to marry rich for financial stability. Be self-reliant, start a business or start small by running smaller projects anything that can generate income.

HOW HEALTHY IS YOUR RELATIONSHIP WITH YOUR FINANCES?

We normally say respect goes both ways and it is earned and not forced. The same principle doesn’t only apply to people, it also applies to money, you earn it then you give it the respect and it will respect you back in multiplications based on the amount of respect you give it. You cannot force it on yourself if you do not respect it enough then you will not have enough of it, no one or nothing sticks around where there is no respect. To give money respect one has to look into certain habits and work towards changing one or few of them.

Some of the behavior/habits that can mess up finances

*Get rich quick mentality
If it sounds or looks too good to be true then it probably is. Most people lose their lifetime investments over getting rich quick schemes that promise double their investments or more overnight. These schemes always crush and they crush with peoples hard earned cash all the time. Investing the right way in different places will give you a better chance of making more money the safer way. Invest, buy shares, properties or start your own business, these are the risks worth taking rather than trying to get rich overnight which might leave you bankrupt overnight.

*Impulsive buying (emotional spending/retail therapy)
Retail therapy is an excuse to waste away money. Women waste money in the name of trying to feel good. Why try to feel good in a way that will leave a dent in your pocket? We all know that will just put more stress and pressure at a later stage. Emotional spending is a waste of money because often that money is spent on things that are not needed. Show me one woman who has gone retail shopping and actually came back with what she has always needed. This kind of shopping is forever all about what makes you feel better for a moment of “weakness” with no positive outcome of your money. Spending the money and coming back to sell your stuff online is a complete waste of money as you will normally be getting less of what you initially spent on the item.

* Knowing the price of everything and every sale
Knowing the price of everything in retail shops shows a character that loves spending just to feed the ‘wants’. A person who knows what they need will only know the price of what they aiming to have and work towards getting exactly what is needed.

*Feeling too young to start saving and investing
It’s never too early to start, never postpone saving your money, the earlier the better. It is not easy for someone who is still young as they tend to feel they can always start a bit later. At a young age, we tend to feel we still young so we need to enjoy all the money we make first because we have all the time to start saving later. The bad thing about this attitude is the fact that it might be extremely difficult to let go of that wrong bad habit later. Start from a young age and it will teach you to get into a good habit and it will get easier as you grow. Investing right away will allow your investments more time to grow as you grow.

It’s not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for. –Robert Kiyosaki

Tips on how to make things right

*Start saving right away
While it’s tempting to wait for the “best time” to save, remember that the risk of waiting may be much greater than the potential rewards of acting NOW. Start now and do it regularly. The power of compounding is one of the most compelling reasons for investing as soon as possible. The earlier you start saving and investing and continue to do so consistently the more money you will make. 

*Have a financial plan
Do not spend your income as it comes. Have a proper monthly plan and account for every cent you use. Draw up a proper plan and follow it. It may sound like time wasting as you may feel you have to spend it anyway but this really works and it can make you aware of unnecessary expenditure that you may see the need to let go. Do not leave anything out on the plan, from entertainment, grocery, utility bills to your airtime or data budget.

*Know your “Wants” versus your “Needs”
The “WANTS” are usually bad habits leading to wasteful expenditure and we can live without. A want is not necessarily a need and it may be that habit that we “NEED” to get rid of. These may be things we spend on and end up not having a use for them, we sometimes give them away or throw them away. The needs are things that we must have, for example, access to good health care, electricity, clothing, and food. Understanding these needs and wants will help you to avoid living on credit or debt. Should you have a need that is affected and credit has to be used, be sure you will be able to settle it. Ask yourself if it is a kind of need you can do without for a short while or not. For a simple basic example, if it is the kind like sanitary pads then that you cannot do without.

*Never save what is left after spending, save first then spent what is left after saving
It matters not how much it is but be sure to make a saving all the time every month. First thing on the plan is the savings then the rest will follow. Have a habit of subtracting that savings amount from your income as if it is not part of your income. If you encounter difficulty doing so rather set up a debit order that will go through the second your money comes through your account. In that way, you can never plan anything on it. Make your savings difficult to cash on so that when you are tempted to go and spend them at any given time then it is impossible to do so. Take it as paying yourself first before anything else. It is only difficult in the beginning but it will turn into a tradition you come to respect and follow and you will thank yourself later in life for enduring. These kinds of attitude can only push you to get rid of all the unnecessary bad habits of having unwanted “WANTS”

*Income should always be greater than the expense
Another important factor of a Financial plan is to make you aware if you are living beyond your income. You cannot be earning R50 000 and your expenses are R51 000, that simply means you live beyond your means and that extra expense may lend you in a serious debt situation. A shortfall of an R1000 every month is too huge. How are you going to recover from that? Do not spend what you do not have.

*Look into investments
Make a research about kinds of investments available and that can be suitable for you. Look into both long-term and short-term investment and understand how they work and how they can work for you. Remember to never put all your eggs in 1 basket when making investments. No matter how great or promising an investment can look never put your money into only one because things tend to go wrong overnight. It is always best to spread your money for better outcomes. There is no statutory amount that an investor needs to invest in order to generate adequate returns from his savings. Lately, we no longer need a huge lump sum amount to invest. Wherever your money is invested in the end results is to create wealth and to give you a better standard of living.

*Don’t invest in businesses you don’t understand
Do not be taken by hearsay that will lead you back to get rich quick schemes and ultimately loss of all your money. Investing isn’t gambling or speculation; it’s about taking reasonable risks to reap steady rewards.B e certain to make proper research and have a clear understanding about where you might be thinking of investing simply put take your investment decisions with as many facts as you can assimilate.

The time is now to create adequate wealth, as it certainly comes with remarkable financial benefits, and not only that but in many other areas of your life. In the process of doing so, keep in mind the habits that might set you back from your financial independence. In the summarized description, be mentally prepared for your finances, so that you do best as soon as they land in your pockets. It`s wise or rather advisable to do a mental deposit in preparation for the actual finances. If you can think it, you be and/or do it.

Wealth consists not in having great possessions but in having few wants-Epictetus