Having a plan, whether that is for debt repayment or a saving goal, gives one a sense of purpose and the discipline to stick to the goals.
This week we have been reviewing the candidates’ journeys over the last six months as our 2023 Absa/City Press Money Makeover Challenge is coming to an end, and we will be announcing the winners on 23 November.
As always, I am in awe of what they have each achieved in such a short space of time. But it is not just their finances – what is most striking to me is how each of them has been empowered in their day-to-day lives.
Writing a budget, tracking your spending and creating a debt repayment plan will not miraculously solve your financial issues overnight, but it will give you a sense of control – that you are in charge of your money and your destiny.
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It removes that sense of helplessness that comes when we feel overwhelmed. Having a plan, whether that is for debt repayment or a saving goal, gives one a sense of purpose and the discipline to stick to the goals.
REDUCED STRESS
Reduced stress is the most common observation made by our candidates. As candidate Mlibokazi said:
I no longer worry about money because there is a plan that I am sticking to at all costs. I may still feel the financial strain, but now I see how it will be resolved and I am actively working towards it.
By taking control of your finances, you can reduce the stress that comes with worrying about money. The reduction in stress is not because you suddenly have less debt, but because you know where the money is going and have a plan for it.
BETTER DECISION-MAKING
Taking control of one’s finances results in better decision-making which, in turn, improves long-term finances.
As candidate Zihle said:
An eye opener for me was realising the need to budget prior to receiving my salary and noting down every single expense ahead of time.
“his helped me to become prepared because month end tends to be busy and everything feels rushed around that time. Having a proper budget in place has saved me from things such as impulsive spending, chasing ‘specials’ and not knowing where my money went.”
When you have a clear understanding of your financial situation, you can make better decisions about your money. This can help you avoid impulsive purchases and make more informed decisions.
This is why none of our candidates relied on their credit cards over the last six months to make ends meet.
IMPROVED RELATIONSHIPS
Improving your relationship with money also improves your relationships with those around you. This is especially true in a marriage when a couple starts to talk about money and work together to reach their goals.
Johan and his wife are planning their retirement goals together and Mlibokazi and her husband are talking about money for the first time.
Mlibokazi said:
I truly believe that these steps that we have taken towards reaching this goal have changed my relationship with money. We had never even done a family budget before.
IMPROVED SELF-ESTEEM
Financial control can also improve self-esteem. In previous years we have seen candidates overcoming depression because they were then in control of their financial destiny.
For our candidates Sello and Raymond, taking their businesses seriously and focusing on separating their personal and business finances has given them the confidence to believe in themselves as entrepreneurs.
“I am a new person business-wise, as I see things differently and I am growing,” said Raymond, while for Sello this has been “the seed that was planted to start my straw-making small business. The planting has been done and the green shoots will emerge from the ground.”
Zihle realised that she has a future as an individual and not only as a provider and caregiver to her sisters.
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This has given her the confidence not only to get out from under the crushing debt, but to apply to study for her master’s degree.
What Money Makeover has proven every year is that, while taking control of your finances and finding the discipline to stick to your plans is challenging, the rewards go far beyond just the numbers.
These steps towards financial freedom are available to everyone, it is not “rocket science”. The only difference is that each Money Makeover candidate had an accountability partner in both their adviser and City Press.
ACCOUNTABILITY PARTNER
That may be a spouse, a friend or family member, or you could even follow these steps as a group of friends. Set out your goals and ask them to hold you accountable.
- Go through your bank statements to understand your expenses.
- Track your actual spending to see where your money is going.
- Identify areas you can cut back on to create savings.
- Commit to not using your credit card by avoiding impulse spending.
- Draw up a list of your debts and what is still owing.
- Start by paying off just one debt at a time.
- Start an emergency fund – using bonuses or tax refunds.
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