I wasn’t always good with money.
In fact, our relationship was downright abusive. I would get some cash in my hand and tell myself that this time would be different. That I’d do better. That I wouldn’t blow it all on things I shouldn’t be buying. That this paycheck, I was going to make a change. And I meant it. Two weeks later, I was broke again, depressed and making the same promises.
My journey with money hasn’t always been easy. Growing up, I was never taught the importance of budgeting or given the ‘doom and gloom’ speech about what could happen to me if I didn’t save for a rainy day. We had many rainy days in my house, but my family got through it because my mummy knew how to save.
When I got my first journalism job I thought I had arrived. I was in my early 20s and my name was in the newspaper every day. So, I felt I needed a wardrobe to reflect that. The problem is, my cheque didn’t measure up to my byline, so I had to temper my ambitions. A colleague of mine was nice enough to invite me back to her apartment to give me some dresses that she could no longer fit. That’s how I started building my wardrobe.
While at her house and feeling confident that she would be discreet, I turned to my colleague and asked her a question that she teases me about to this day, “How do you save money?” She was always good with saving and I felt she could impart some wisdom.
After cracking up for five minutes, she finally offered up some friendly advice. Firstly, she noted that I spent a great deal of money in coffeehouses. This was long before Starbucks was even in The Bahamas. Every day, I would plunk down cash on lattes, cappuccinos and iced coffees, then follow that up with a lunch run. It got expensive really quickly. She said I had to change all of that.
I still buy lunch every day. (Wait, don’t stop reading. I have a point.) That didn’t change because it didn’t have to. I overhauled my entire spending and made savings a major priority, so I allowed myself one treat. When making changes, you don’t have to be extreme. That’s a recipe for failure.
But, what my colleague was showing me was that I was not a good steward of my money. Bahamians on the whole, are not good savers. It’s been well-documented in the media.
Last month, the Central Bank of The Bahamas, in its analysis of its Financial Literacy Survey 2018, revealed that Bahamians are struggling to “make ends meet” and their monthly earnings are “usually insufficient” to cover their living costs.
Last year, central Bank Governor, John Rolle revealed that 90 percent of the deposit accounts held by residents in The Bahamas have fewer than $5,000. Making matters worse, some households have really high debt service ratios.
Meantime, the Inter-American Development Bank’s (IDB) latest country strategy recently revealed that the National Insurance Board (NIB) contribution rates must more than double to over 20 percent in order to prevent a long-term pension crisis. In layman’s terms, we’re screwed. Now and in our old age if something isn’t done now.
A part of it is not our fault. Back then, financial literacy was not discussed as much as it is today and even today it’s still not where it ought to be. Sadly, many schools still don’t put an emphasis on teaching children to be good stewards of money.
But, just like a part of it is not our fault, a good chunk of it, is. We have grown too content with living beyond our means and attempting to impress people who don’t matter. There’s nothing wrong with wanting nice things and to travel to nice places. But, we must make sure that we can afford such trappings.
It used to annoy me to see banks advertising loans for vacation. Even back when I was dumb with my money I knew that that didn’t make any sense. If I had to borrow money to go on vacation, that was proof that I couldn’t afford to take one. I wasn’t going to borrow money for an experience because there’s nothing worse than coming back from vacation broke and indebted.
Another thing people seem to think is that saving would be easier if they made more money. I was one of the people who believed that, too. To a small extent, it is true. Someone who makes $200 a week and has to pay rent, electricity costs, water, buy food and pay for transportation simply cannot afford to save. If they do, it would be very minimal.
However, I have since learned that who you are with $200 is who you would be with $200,000. It doesn’t matter how much money you earn. If you’re not good with $30,000, you won’t be good with $300,000. Plain and simple. It’s about habits and being disciplined.
This is by no means a reprimand. Trust me, I am in no position to do so, as it took me a long time to get a grip on my financial situation. Things didn’t turn around immediately after my colleague’s advice. I had to lose a lot and be placed in a position where I had no safety net to catch me for me to get serious about my finances.
Some will say, they deserve a new car or the latest iPhone or a nice vacation. All of those things are nice to have. But, what you really deserve is freedom, a stress-free life and not to be stuck in a job you hate and can’t leave because you have to make monthly car payments.