You must gain control over your money or the lack of it will forever control you. –Dave Ramsey
The people who get ahead financially in this world have learned one thing; how to control their money.
Controlling your money means getting down to the nitty-gritty; knowing where you earn your money from and where it all goes. It is the delicate balance of channeling your money to where you want it to go and not following it to where it is going. It is knowing who is spending your money and who are earning your money.
Statistics show that 90% of people don’t budget and therefore have zero control over their money. These are the guys who have no prior plans for their money and once income hits their accounts, they spend it on whatever expenditure is in front of them.
It is payday. You are waiting for money to be credited into your account with bated breath. You keep sneaking about to check if money has hit your account. You do not have any particular plans for the money and you have zero discipline. Immediately money hits your account, if it is lunchtime, you withdraw and go eat the best lunch, if a colleague approaches you on your way back from the ATM and borrows money, you give him and then go back to the ATM to draw more.
Your company pays salary on 25th of the month. In the months when 25th falls on a Sunday, the salary is paid on Friday the 23rd. You have a few standing orders for saving some money into your Sacco and another for paying for some personal loan that you have no idea where it went to.
Standing orders are meant to go out of the account on the exact date or the next day if the actual date is a holiday or weekend, therefore in months where 25th is on a Sunday, standing orders are debited on Monday. That gives you three full days with the money.
You start on Friday and withdraw as much as you can and hit the entertainment joint. You are just as reckless as most young people and you have been bewitched to forget that standing orders will go out on Monday.
Friends join you and you buy them whatever they want. You exhaust the cash and rush to an ATM nearest the joint. You can even take a taxi to go for more money for clubbing. You do not mind that by withdrawing from a different ATM other than your bank, there is a ksh300 cross charge.
In no time this second withdrawal is finished and you have hit your ATM card withdrawal limit.
You then remember that you can swipe for drinks and the waiters confirm that they actually have a PDQ (swipe machine). You continue drinking and enjoying yourself, then you swipe the card in the wee morning of Saturday; at some ungodly hour like 3.39am. At that time, you have zero ability to comprehend how much you have spent so you just go home and sleep.
Next day you are up in the afternoon with a hungover and your friends calling again. You don’t check the bank balance and you just head back to the pub kutoa lock. You drink and leave earlier than yesterday because you are tired, swiping your card at around 1.00am.
On Sunday, you are feeling guilty so you decide to take the family out. You don’t want embarrassment, so you check how much is remaining on your account, it is just Ksh 4,332. This is not enough for the family outing, but you remember you have a credit card, so you go out and spend with the credit card.
As the family is enjoying, you are wondering how standing orders will go through the account tomorrow. You remember you still have some unpaid bills for last month and it then that it hits you hard that you are thoroughly f***d!. And there you get into the borrowing circle.
Financially savvy individuals have a plan. They save first and they know what is available for them for entertainment, investment and basic life needs.
Start your financial journey by controlling what happens to your money and not vice versa.