We all have choice. Sometimes it’s between a bad and a worse situation. But the premise remains: we all have choice.
And so when I read a question or a blog sent in to cashy.me, the financial empowerment platform I set up, where a person is asking for help – a lot of the time it revolves around credit card debt – and where they include in their lament that they couldn’t get something done, or receive information from a bank for example, because they were away on holiday – I stop in my tracks.
I feel like reaching out and (gently) shaking this person by the shoulders and saying, “Holiday? You went on holiday when you had all this to deal with?”
I fully appreciate that we all need down time, but when there are bills to be paid, and debt to be serviced, cut your cloth to fit, and think cheap staycation.
And perhaps you could ask yourself these questions – I have answered them on behalf of the people I refer to above:
Question 1: Can you afford it? No.
Question 2: Can the money you spent be used to pay down your debt? Yes.
Question 3: Are you living within your means? No.
Question 4: Are you serious about getting a handle on your money and your life? No.
One problem with dealing with delicate issues such as the way we handle money, is that people don’t want to hear it as it is. They want a cushioned, diplomatic response, and definitely don’t want habits and the way they live their life dissected and scrutinised. But to get a grip and be masters of our destiny, there is no other way.
This is another example of unrealistic expectation:
I know of someone who wants to retire at around 40, doesn’t earn a lot, is in debt to the tune of hundreds of thousands of dirhams, and who thinks nothing of going out (aka spending money) at least a couple of times a week … it just doesn’t add up.
Everyone I meet is on top of so many aspects of their lives. So why is it that things fall to pieces when it comes to managing the money in their lives?
I’m not dismissing what anyone is going through, or downplaying how truly difficult it is to change, and for that change to become habit. But the honest truth is that most people seem to coast along repeating patterns of behaviour that got them into trouble in the first place, and looking for something external to fix the problem – like taking on more debt to pay down existing debt due – but all that does is make the problem worse.
And that’s probably how it came to be that, according to Strategic Analysis, a political risk consultancy specialising in the Middle East, the average UAE household now owes almost a hundred thousand dollars, and about half of Emirati citizens say they can’t afford their loan repayments.
It seems to me that most people just consume life, crossing off the days saying “if only” and “I wish” – believing that increasing their sources of income and getting a bigger salary will “fix” their problems. But that’s the wrong end of the stick. Salvation is in living within your current means, and figuring out what’s truly important to you.
There’s a minority of people who do just this and knuckle down to make their dreams a reality.
They go without, know all their outgoings and live frugally – for years, perhaps – for as long as it takes.
To an individual, this is what truly self-made start-up entrepreneurs do to “make it”. They think through carefully what’s more important to them. It sounds simplistic, but it’s as basic as this: a “must have” pair of shoes and meal at a fancy restaurant, or the chance to be in control of their fate and get that start-up business off the ground. These people know what it’s like to live on a pittance, and that change and success doesn’t happen over night.
If we truly want something, we must be willing, and want to, chip away at our goals day after day after day.
So how about being proud of being on top of the money in your life, and admitting and then saying out loud that you can’t afford something, or that there’s another, more important thing that you want to spend your money on?
A major issue people have admitted to me is peer pressure. Those who I’ve come to know who have started making inroads into spending on what counts for them, and getting back their life options – which includes not going out, or perhaps not eating a meal if they meet up with friends simply because they want to spend that money on something else – these brave few have shared that they’re under intense pressure from their friends to stop what they’re doing and go back to their past spending habits. If your friends are true and good, they’ll encourage you and perhaps even join you on the journey, not hold you back.
Remember, you always have choice. How about choosing how to spend your money where it counts, so you can have your best life. Perhaps looking at who you choose to hang out with is part of that process.
Nima Abu Wardeh is the founder of the personal finance website www.cashy.me. You can contact her at firstname.lastname@example.org