Mind the three guys: Money, time and communication

Whatever your big goal in life might be, it will fall apart if these three elements aren’t strongly in place: money, time and communication. Your big picture for what you would like your life to be like might be the same or completely different, but whatever the case, you are unlikely to achieve it without money, time, and communication.

For this week, we will start looking at money before we can focus on the other two in the coming weeks. Money keeps food in our belly, clothes on our back and a roof over our head. Money in the bank or investments guarantees those things for the near future, giving us the flexibility to do whatever changes we want to make in our life.

Truth be told, the financial life of the average Malawian is basically a paycheck-to-paycheck financial state. I hope to share with you how to move from that to a financial state where savings are somehow guaranteed. Here are three key principles for making that transition.

First, commit to eliminating or constraining your own worst spending practices. Many people make the immediate assumption that this means one should completely stop spending money on personal pleasure. In truth, it simply means cutting the worst of your spending practices, the times when you spend money and get little value out of that spending. Our minds immediately snap to the times when we spend money and get a lot of pleasure. Instead, one’s mind should flash to the areas where we spend money out of routine, but without getting any real pleasure—or at least not enough pleasure to make it worthwhile. For me, I’ll think of things like buying a bottle of alcohol-free wine or putting some chocolates in my cart at the shopping mall or impulsively buying some item that I had no real desire to purchase before I saw the sale. Those are the “junk” things that need to be eliminated. Use a critical eye with everything you buy. That doesn’t mean saying “no” to everything. It just means saying “no” when it’s not really important to you. The thing is, once you start looking at each purchase in that way, a lot of purchases end up looking like “junk” purchases. They don’t make your life noticeably worse by cutting them, but they do free up money you need to get rid of debts and plan for the future.

Secondly, find ways to really squeeze the areas where you spend money but don’t really care. I don’t really care whether my household supplies are generic or branded as long as they do the job, so why spend money on the name brand? Take each of the bills that you receive each month and dig through them. Do you need some of the line items on that bill? Go through your receipts. Are there any items on there you could have purchased in another form—generic, bulk, or something like that—without losing any of the value to you? If so, be smarter with your grocery planning next time. Don’t be obsessed in going for certain expensive special brands; who are you competing with? Get what you can afford; the difference is very little, if any at all.

Lastly, get rid of debt and don’t acquire more. Freedom from debt is an amazing thing. It will give you the lowest monthly bills you will likely ever have in your adult life. Instead, all of that income that would have gone into those debts stays with you, to do with what you feel is most important. Of course, there are specific situations, such as a home or investment loan, where a low-interest debt makes sense. There are also reasonable arguments for investing excess money rather than paying down a very low-interest loan so long the income on the investment outweighs the loan interest rate. Having said that, paying down debt is virtually never a mistake.

My personal experience is that as I made these changes in my own life, I both began to feel less stressed out. I also felt less tied to my current jobs and began to have a reservoir of cash in the bank to help me through transitions that might be coming up. Money will never be enough but we can have enough to keep us happy—it all depends on how you manage it.

A blessed weekend to you and yours!