How to fight the lies you tell yourself about money

The war against willpower has many casualties. I would know because I have had a lifelong battle with it in my quest to be physically fit. Sometimes I surprise myself and work out, but most of the time I can’t summon enough willpower to do it.

After many false starts I had to stop lying to myself and face the truth – the things we leave to chance or at the mercy of discipline are very unlikely to materialise. This is as true of exercise as it is for money.

If you are waiting for discipline, you might never start saving and investing, and the more you delay, the more you lose out on the benefits of starting early, such as compound interest. You don’t need discipline to start. What you need is automation. Once you decide what you are saving for, how much you need to set aside regularly and the platform you want to use, you can use methods like check-off from payroll or standing orders to channel money automatically to your savings and investment accounts. This way you save and invest without your having to summon any willpower or discipline. If these two options are not available to you, at the very least, let your first transaction when you receive any income be to transfer at least a tenth of it to your respective savings and investment accounts.

Beside the discipline myth, we tell ourselves many other lies about money, and they stand in the way of making financial progress. Let’s have a look at some of them:

I’ll start saving/investing when … I get a pay raise

The funny thing about finally getting that pay raise is that we suddenly want to treat ourselves and acquire all those wonderful things that we couldn’t afford on our previously inadequate income. If you don’t lay the foundation to make that little you have work for you now, even the most generous pay raise will not help you. It is good to move on up and to aspire to enjoy the finer things in life, but you can only secure the life of your dreams by making prudent choices consistently as you work towards that goal. This means working towards acquiring assets that will generate a steady income, so that it gets to a point when you never have to worry about money again. Start where you are with what you have, and when more comes, you will continue doing what it takes to reach to your ultimate goal.

You only live once!

Some people take the phrase “live each day like it is your last” too literally. You will be alive tomorrow, and the day after that and for years to come, so you need to start getting ready for that time. Don’t act like it doesn’t matter, then act surprised when it creeps up on you with pressing needs that you can no longer ignore. Think about your life a year, five years and 10 years from today. How will your circumstances and financial needs have changed? What new expenses are inevitable? What do you hope (or rather plan) to have done or accomplished and how much money will it cost you? Being financially prudent doesn’t mean denying yourself joy in the name of saving and investing. By all means have fun in the present, but don’t sabotage forget to save!

I don’t have the money to invest

You don’t need to be rich to start investing. You can start investing in stocks with Sh5,000 or less, or buy a bond for Sh3,000. You can start buying unit trusts with Sh1,000. You can start saving in a Sacco that will earn you dividends and give you access to credit and/or opportunities to invest in real estate.

I must buy this bargain deal now

If you buy a pair of hot shoes worth Sh3,000 at Sh1,500, you did not save Sh1,500; you spent Sh1,500. Money went out of your pocket, not into your investment account. It would only be saving if something you had planned to buy was on sale. The world will never run out of new, shiny, must-haves, but we can’t have them all. We need to choose the ones that truly matter to us.

Felista runs money management group 52-week Savings Challenge Kenya on Facebook. You can email her on [email protected]