The joys of being employed means you have something to look forward to- PAY DAY. And many of my colleagues would be excited about the 20th day of each month, but for me pay day was another reminder of the LSL2 500 car loan instalment, the LSL2 000 due to clothing account, the minimum credit card payment and my dependency on my sister. This feeling of inadequacy got me down and to compensate for it, my credit card continued to finance my social life in order to keep up appearances. The struggle of living a lifestyle I could not afford soon caught up with me. The weekly calls from credit collectors harassing me to settle the arrears on my account, the debit orders that were unpaid due to insufficient funds in my account elevated the financial distress to greater heights.
“You must gain control over your money or the lack of it will forever control you.” ― Dave Ramsey
My fourth financial mistake was not saving for rainy days also referred to emergency savings. Driving to a shopping complex (in my car I couldn’t afford) to run errands for my sister, I had a puncher. Firstly, I didn’t know how to change a tyre then, but I confidently stepped out of the car to deal with the situation at hand. The car has a spare wheel, so I would be okay I convinced myself. To my unpleasant surprise, the spare wheel was not in the car- someone must have taken it out! My stress levels quickly increased to unmanageable levels and I panicked. Reality soon hit and I realised that I needed LSL1 800 immediately to buy two new tyres and I had absolutely no savings – NOTHING! But working for a financial institution, I applied for a temporary overdraft to deal with the emergency at hand; payable in 3 months at an interest rate of 7% per annum. This was another financial mistake I should have avoided had I planned and saved for emergencies.
Taking stock of my financial mistakes, I was in a lot of debt- clothing account, car loan, credit card, an overdraft and zero savings. At this point, I knew something had to change, and change fast. I had to sacrifice my 13th cheque and bonus to settle the temporary overdraft and clothing account, but still had no savings. Although I was not out of danger yet, knowing that I was working towards a recovery somehow lifted my spirits, but there was still that discomfort.
My sixth financial mistake was not investing for the future. We often take the financial concept “pay yourself first then service your creditors” for granted. I had no unit trusts, fixed deposit, 32 day savings or treasury bills saved to name a few. Again, I justified why I did not have any investments- I WAS BROKE! How then was I to build long term wealth and work towards financial freedom? The last financial mistake was spending my pension fund pay-out to settle debt when I changed jobs. Of all the financial mistakes I’ve made, this compromised everything.
By so doing, I robbed myself of LSL50 000 excluding compounded interest I could have generated had I not spent the money. Debt is psychological…
I tried to justify spending the pension pay-out, convincing myself that by settling all my was me working towards a financial recovery. I convinced myself that I would recover the LSL50 000 I spent, that I was still young and had time. This is NOT true!!!
It took a lot of courage to share the mistakes I’ve made in my life, to accept my failures and to learn from the mistakes. As I approach my 30s, I am confident that my finances are intact. I am motivated to do better but most importantly, I am excited to use my story to inspire, uplift and educated those who are yet to make similar mistakes.
