Letter 5. Managing Your Money

Getting Money wise

My dear Thinette

Dreaming of having many beautiful things one day is not a sin. Not thinking where the money to buy it with will come from, everyone is guilty of, but it is a sin not to do any planning to get what you want, stealing is not an option. When you don’t value and respect money, it will take a great amount of discipline to get to that point. Being money wise by managing your money wisely. Know all the how, what and why of money, it is a skill you can learn to stay clear of the debt trap. It goes along with everything else, planning is the key.

Plan to make money work for you, if not, you work for money all your life and get nowhere.

Managing your money will be the foundation to financial success.

What Value does Money Have?

The way you think about money will have an influence on all relationships my dear. How important is money to you, where would you rank it. High on the list, normal or not important. A means to survival, a means to comfort or a means to luxury.

Man's wallet with multiple credit cards.

Find a definition for money and it’s value in your life, why it is important to you? You have to have the basics but what else would you like to have? The way you think about money will have an effect when choosing a career and the planning of your future and to get control over your money.

Notes of money planted in the garden and hope it will grow

When for the first time did the use of money make an impression on you. What impact did it have on your outlook and how did it influence your beliefs or maybe it inspires you.

Mine was a picture of a yacht in a glossy magazine, the interior was spacious and decorated with navy and white with bright sunny yellow cushions. It spelled affluence and made such an impact on me but it only stayed a dream and an image.

I never made it became a realty, but was never forgotten. It is still at the back of my mind, simmering and might manifest, you never know!

A super yacht at the harbour as a goal

Only a few people with a vision, a plan and dedication will make it come true. It lies in everybody’s ability, but you have to have the Desire, Determination Persistence and Discipline to make it real. It is up to you!

How will I earn My Money?

There are only two ways looking at this love. Either go with the great interest and passion in your life, make it a career and get up every morning with a song in your heart, but only have enough money to live comfortably, or find a career earning you lots of money, live in luxury and never feel satisfied and happy with all the money in the world.

There is another way. Maybe you are lucky to have a passion that will earn you great money. If money is important to you, find a career which will earn you all the money you need and be happy too.

Also, very important, choose a career that will not be made redundant within the next twenty years in the new digital technological era. Technology will change the face of careers as we know it and many careers will fall away and disappear in this uncertain world.

Do some research on all these aspects to make an informed decision in the field of your choice, a service based career seems to have a longer lifespan at this moment. Paper knowledge is not that important but practical skills do count.

How do I manage my Money?

Know where your money is going. Do a test for thirty days, keep tags on all your spending, name and file the receipts. Keep a daily record of all you are spending, on what and why.

After thirty days you will have a pretty clear picture of the trend in the way you spend your money uncontrollably, see if it is working for you. If not happy, adjust and be disciplined to make it work for you.

Most people only live for the NOW, thinking they will stay young forever, have a work for ever and live forever. The reality of old age, losing a job and death do not occur to them.

Planning, plotting and scheming your future, how to do best for you and your family is very important. Do not just live, over spend and enjoy life as if there is no tomorrow, and be out on the street at old age.

To live life without giving this a thought, will be meaningless. Do some planning and live with a vision.

Why Budget?

 repeated image of COST to illustrate the raising of the cost of everything

What is the meaning of a budget? Budget is just another word for planning the spending of your hard-earned money. You draw up a framework with all the aspects of importance and add your information.

How much money you should spend on different expenses. It is the proposed way to spend your earnings wisely, remember never spend more than you earn.

If ends does not meet you will have to cut on certain issues or find a better paid job, but you have to stay within your limits, this is not negotiable, it has to happen. Do some proper planning.

Items that should be on your budget framework list are all your monthly responsibilities and all other expenses. It is important for you to have a roof over your head, sleep, eat, clothes, drive, feel safe and healthy.

Never spend more money than you have.

Start small and keep costs low in the beginning. Find your feet before you start running. People and friends will respect you when you plan wisely and stay out of debt trouble.

It is satisfying to see how you grow, from humble beginnings of second hand furniture, keeping it in immaculate condition, to the empire you are building, it is very rewarding.

Picture of a humble room with little furniture

Having a clean well maintained humble home is far better and more welcoming than a state-of-the-art house dirty and messy. Stick to your budget and grow slowly with patience.

How to Prioritise.

How do I know what is important and what has priority. Start with your needs. What would you need to live everyday

  • Pay yourself first every month at least 10 % of you earnings into a one way account, only in but never out. This is savings you never touch until the age of sixty. This becomes part of your retirement fund. By the time you reach retirement, funds are never enough to see you through my dear. Start from day one! You will not even miss the money Now, but it will make a world of difference for you Then.

  • A place to stay, by the means of moving in with some housemates or rent a place. It will all depends on the budget. Moving in with a friend is wise and save diligently to get your own place. Have at least three times the earnings you get in reserve.

  • Utility bill for the usage of electricity, water etc.

  • A car payment and fuel whether it is your own or a contribution to a transport club.

  • Medical aid scheme. Getting sick is very expensive my dear. The best is to join a medical aid scheme on the level you can afford. Ask the company you work for if they have a medical aid contribution?

  • Food. Plan your menus and buy in advance every week. you will stick to your budget and not buy some Wants. Treat yourself with Take-A-Ways once a week or month and make it a feast, but that is that, no more for the rest of the month.

  • Pay yourself an allowance, to buy new clothes, shoes, cosmetics etc.

  • Save money into your savings account to accumulate for something big you really want, maybe a good deposit on a car, a new TV ect.

  • Image of staples of coins to illustrate growing of savings

Tips How to Use Money Sparingly

It is not just saving money that is important love, it is saving on everything else from food, electricity, clothes, fuel ect.

  • During summer close the windows, curtains and blinds at nine in the morning to keep it cool. Use fans and if you have to use the air conditioner keep it at 23*C.

  • During winter keep windows, curtains, blinds and doors closed to prevent draughts. Open the windows at mid day for fresh air. Set the central heating at 20*C .

  • Buy clothes when shops have sales to get rid of old seasonal stock, normally during February and then again in August. Keep an eye open.

  • Use LED lights bulbs and always switch the lights off when leaving a room.

  • Boiling water and pour it in a thermos flask for tea and coffee, all elements use more electricity.

  • Try to use the oven of the stove sparingly for the same reason.

  • Close the tap when brushing your teeth.

  • No need for a full bath of water, a shower uses much less water.

  • Grow you own herbs in pots on the window sill, it looks pretty and save you money. Grow your own veggies if you have a garden it is therapeutic too. Nothing better that tomatoes and lettuce fresh from the garden.

  • When out on a weekend trip visit some farm stalls to get fresh organic vegetables and fruit at a lower cost.

  • Plan your menus for a week at a time, buy your supplies on a Saturday and portioned it for the week to come. It saves you a trip during the week and saves money.

Saving

Having savings accounts is of the utmost importance my dear. A long term untouchable savings account ear marked for retirement and a short term savings account for everyday use. Here are some expert tips to help you achieve your financial goals.

The long term account speaks for itself, a one way untouchable account. Have a debit order taking care of it and forget about it.

A short term account can serve many purposes from saving for a new car, TV, holiday, etc it is there for your discrete use.

Know what the purpose of your money should be my dear. Managing your money it wisely and enjoy it.

Your loving grandma.

Stella

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