I consider myself a successful career woman, 33 years old, single, quite tall, slim and quite attractive. I occupy a senior brand management position and enjoy a relatively high compensation and benefits package. I drive a brand new company car with gasoline charged to my budget. My problem is: I’m always broke! I can hardly stretch my cash flow from payday to payday. What goes into the ATM and my checking account, goes out. I can hardly maintain the minimum balance in my bank accounts. I have great difficulty paying my two credit cards; I just pay the interest on all my purchases each month.
I’m considered a “fashion plate” in our company with many female employees eyeing me from head to toe everyday and expressing appreciation for my fashion sense. In management meetings, my bosses and peers “rave” about my clothes and consider me their ramp model.
My mother nags me about my lifestyle (i.e., my branded wardrobe, shoes and bags, my nights’ out with my single friends, partying, etc.) and my not having any investments. She keeps asking me how much I earn and how much I’ve saved. The truth is I have no savings at all. I’ve been keeping mum about my financial difficulties to my Mom. She thinks I should be contributing to the household budget since she figures I’m earning so much.
I wish I can manage my finances but I’m already knee deep in my debts and find it difficult to have a simple life style now. I have a reputation in my office to maintain. Please help me, if you can.
Ms. Successful But Broke
You are not helpless; you only think you are. You can get out of your “financial crisis” IF you really want to. But this involves changing your thoughts, your values, your spending behaviors and your habits. If you refuse to change your lifestyle your only other alternative is to continue with your current spending habits, be in debt, be in bondage to your desire to live up to the image you think you have created.
If you really want to solve your “financial crisis,” you can. Your spending habits are within your power to control. You are single and have no children to spend on. Being an intelligent woman, perhaps you have already thought of the following solutions which I will give to you since you have asked my help.
First, CHANGE your mindset that you are helpless to do anything about your situation; that you have to maintain your image of being a “fashion plate” and ramp model to your superiors, peers and office mates. Take this fantasy out of your mind. Take away the desire for adulation and acclaim. This is driving you to spend and to acquire expensive things in order to create an expensive image.
Second, STOP buying: clothes, shoes, bags, accessories, etc. Make do with what you have now. Be an expert in mix-and-match styling. You can be smartlooking and be power-dressed without adding to your current wardrobe. STOP thinking that your peers and office mates expect you to dress like a ramp model in the office.
Third, do away with your credit cards. Have only one, if you must. And keep this and your ATM cards at home. Remove them from your wallet; otherwise, the temptation to use them will become difficult to resist.
Fourth, make a budget of your monthly, weekly and daily expenses. Stick only to what is essential. Compute how much cash you need each day, each week and each month for your meals, and necessary expenses. If you are driving a company car with free gasoline, what other things do you need to spend on? Put only enough cash in your wallet that you will need to spend for the day. Spend cash; this way, you will discourage yourself from being acquisitive. Limit your nights’ out to Fridays only and bring only the amount of cash that you can reasonably spend that night. Tip: before you go out, put something into your stomach so that your hunger will not cause you to order more food than you can afford to spend on.
Fifth, pay and liquidate your obligations on your credit cards. And don’t use even the one you have until you have liquidated your obligations.
Sixth, balance your checkbook. Record all the checks you issue out vs. the amount deposited. Reconcile your check book balances with the bank statements you receive every month to be sure that deposits and withdrawals are accurate.
Seventh, resist window shopping because you will only be whetting your appetite. Resist going to the malls and tiangges, to bazaars or to stores advertising big sales. If you don’t need something, it is expensive. Don’t stock up on items you think you might need later on to give as gifts to special people.
And, yes, you must:
1. Set aside money to pay your credit cards. Set this as your goal every pay day; save 25% – 50% of your net earnings to pay your credit obligations. Once paid, stop using your credit card or use one credit card frugally.
2. Invest another 25% of your earnings on investments you can’t withdraw. Ask your bank about this.
3. Contribute to your mother’s household budget. Imagine how much you are saving in apartment rental, electricity, water and meals. Talk over with your mother what you can give so that it will make a difference in the household budget and be of help to her.
4. Tithe on your income because a portion of your earnings belongs to God to be used to spread His kingdom. Don’t scrimp on this.
God bless you.