Time to face the man in the mirror

Stop running from your financial situation; deal with it head-on and make a change. PHOTO| FILE| NATION MEDIA GROUP

What you need to know:

  • If you feel like you’ve been going round in circles, it is probably because you avoid facing things head-on. It’s time to stop running away from reality.
  • Your bad financial habits will not be dealt with by your employer giving you a pay rise or by getting a loan from the bank.

There was a time I used to go to the ATM, but I would never take a receipt after my transactions. I didn’t want to deal with my bank balance, especially when I remembered there were still some unpaid bills. I didn’t want to think about what I would have to give up because I had withdrawn money for something else.

A lot of people try to avoid their financial reality in this manner, but the best gift you can give yourself as we approach a new year is to face the man (or woman) in the mirror. As Michael Jackson sang in his hit song Man in the Mirror, you need to start with the man in the mirror and ask him to change his ways. If you want to make the world a better place, look at yourself and make that change. Running away from dealing with the things that we need to deal with is like trying to travel from Nairobi to Mombasa while avoiding all the routes, turns and police checks that will actually get us to Mombasa. We can’t simply expect that somebody will come and whisk us away from those realities. We have to go through them.

If you feel like you’ve been going round in circles, it is probably because you avoid facing things head-on. It’s time to stop running away from reality. Your bad financial habits will not be dealt with by your employer giving you a pay rise or by getting a loan from the bank. Your children are not to blame for your financial messes. So what can you do this coming year to face then man in the mirror so that the (financial) resolutions you set actually have a chance of being realised? Here are some tips:

 

• Get intimate with that bank account balance. Most people are not aware at any given time what amount of money they have or don’t have. Maybe you are doing what I used to do with ATM receipts. Thankfully, because of technology, these days some banks do not hesitate to tell you what is left in your bank account via SMS or email immediately after you transact. Don’t run away from this knowledge. And more importantly than just looking at the balance, is generally knowing what you are going to use that money for. This is more than just the monthly budget that you save on your Excel sheet. It is about being as intentional as possible with money on a day to day basis. On that same note, you should also get to know your payslip. Look at it. What is gross, what is deducted (taxes, loans, pension), what gets paid into your account? Far too many people think about their salary as only what gets credited into the bank account.

• Come to terms with your debts. How much do you owe banks, Saccos, credit cards, mobile money loans, relatives, friends, etc? Many people think they have an idea of what they owe because they’ve been paying it down. For example, if you borrowed Sh100, 000 and you have been paying Sh10, 000 per month, you may think that after 10 months you will be close to paying off the loan. However, in the initial stages of a loan most of your repayment goes towards interest, so this may not necessarily be the case.  People do get a rude shock when they print the statement and look at their mortgage balance, credit card statement or car loan. You probably still owe a lot more than you think.

 Have the money conversation with your significant other or relevant family member. Money is one of the key reasons for marital conflict. The problem is not going to solve itself by avoiding the conversation. If you’ve been married long enough you know that this tension will show up elsewhere. Timing and how things are said is very important, but avoiding dealing with financial issues is never good for any relationship.

• Be courageous enough to face the investment avenues that make you feel good but are actually not working. We feel good saving here and there, having a policy, contributing to a chama or just putting money in some investment hoping it will work. Is it working? Yes or no? If it isn’t working, either fix it or exit it. Far too many of us are in chamas because they make us feel like we are making progress, but truth be told, money may be better off elsewhere or in another chama with different dynamics. If you are not willing to do the hard work of making your chama run as it should, leave it.  Same goes for other investments.

• Everybody wants to make more money, but nobody ever wants to sit down and actually figure out how. This is why we play victim and blame our employers, families and government for our financial woes. Things that may have been beyond your control may have happened, but what are you going to do about it? You want to earn more? What is your plan? Is there something you are going to do