In PART 1, we looked at the zones of life. We need to acknowledge that it’s never possible to simply ‘drop’ (or parachute) into the earning zone of life. We get to this point via a learning journey.
This means we already have firm attitudes about money when we start to receive our salary. We’ve absorbed these attitudes through our life experiences. If Dad said, “I’ll always struggle when it comes to money,” we may have the same deep belief. We may hold on to that belief. As a result, we won’t feel motivated to (for example) work out a written budget. Then we will struggle with money. “No surprise,” we’ll say, “I’m just like my Dad.” We’ve fulfilled an expectation, rooted in a negative attitude.
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Or we may have had a mother say, “Manage your money well, son. It’s not the rands you earn that are important; it’s the sense you put into managing them!” So we have a deep belief (an attitude) that we must manage our money wisely. As a result, we learn all we can about managing money, and we attain success. We’ve fulfilled an expectation, rooted in a positive attitude.
It’s worth the effort to examine your attitude towards money. Ignore your attitudes, and you may be starting a long journey with a serious handicap. It’s likely that you need to talk to someone about this financial self-analysis. Choose a mature person who knows you well. A spouse, a parent, a sibling, or other caregiver is often in the best position to help. (They already know the attitude you have towards money.) And if you do identify an attitude that will hinder your financial journey, take steps to ‘change your mind’.
The economic system of the world depends on everyone spending money. Advertising will always scream, BUY, BUY! Your own eyes, and (often) those you love will scream the same B-word. If you BUY, BUY beyond the limit of your salary, then it’s BYE, BYE to financial success. You know that DEBT may be unavoidable (say if you are buying a house), but you also know that debt that breaks your budget (think about credit and store cards) could kill you. You take debt very seriously.
You know the difference between essential consumables (like food and clothing), and assets (these make you wealthier: like a house, insurance products, and investments).
You’ll be managing money for about 60 years. Surely it’s valuable to consider financial goals up front? (From what we’ve seen already, building up a retirement fund for the red zone is an important goal.) Significant events like buying a house, marriage, the birth of a baby, the marriage of a son or a daughter – all have high financial demands. Often we know when these are likely to occur, and we can save money for them. Usually, savings plans could be short-term (say a few months), medium-term (1-5 years) or long-term (over five years).
Our attitude towards money will determine everything we do with money.
Jay Pillay (1953- any time soon)
Jay Pillay’s first two critical decades were spent where his first decade began – in Pietermaritzburg. After studying at ML Sultan Technikon in Durban (anyone remember that place?), he then joined the sugar industry, working in Tongaat, Durban, and Xinavane – a sugar mill village 120km north of Maputo. Oh yes – there was a brief period of unfaithfulness, when he flirted with aluminium in Richard’s Bay. Upon retirement, he and his wife Dorothy – settled in Southport.
Jay began writing about salary management (for ordinary people living on a salary) in the early 2000s. Many of his articles were published by The Ripple Effect, a Durban-based corporate newsletter. In all his writing, Jay says he attempts to emphasise the big picture in salary management: it’s not just about making it to your next payday – it’s about making it to the end of your working life. It’s not just about your working life – it’s about your retirement too. It’s not just about the cost of living – it’s about the cost of dying too. It’s not just about you as a salary manager – it’s about your dependants too.
This 16-part series is being published here for the first time. It would be invaluable for salary managers in the early years of their lives – who realize that salary management is a lifetime business. Finally, it’s not just about reading stuff on salary management – it’s about careful thought (that means time, well invested), and then taking appropriate action.
There’s a second finally. To daughter Nikki, thank you for the picture.
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