FLASHBACK TO FEBRUARY 2008
My husband and I had just moved to Scotland. It was the tail end of a harsh Scottish winter and spring was upon us. We both got gainful employment almost immediately and we had loads of cash. To top it all off, we were expecting our first child! We were living the dream and loving it. Life was great!
In the blink of an eye, our situation changed drastically. My husband lost his “permanent” job. While I was still employed, it transpired that I would not receive maternity pay from my employer as I’d not worked with them long enough to qualify for it. That meant that I would only be entitled to statutory maternity pay from the government which in itself was a pittance. As if that weren’t dire enough, our UK residency did not allow us recourse to public funds (state benefits).
My mom always says “It is at our lowest points that we find our greatest strengths and build the best foundations” How so true this has been for us.
My husband would not get another corporate job for the next two years. And it was during those two years that we learnt and understood the core foundations for a healthy relationship with the rules that govern money. It is these lessons that I want to share with you here;
“Your greatest asset is your earning ability”
After several attempts to get a corporate job during the middle of the credit crunch, we decided that no matter what we did we needed to get money in. And so, the type of job became of secondary importance and rather the focus turned to earn money. To this end, hubby took up a delivery job to keep income coming in. Our attitude was it was for a season and first things first, we needed to generate income.
“Treat your savings as your 1st expense”
Never having known lack before this period, my attitude to money had been that it was a given and the whole concept of an emergency fund had never crossed my mind. The sudden realisation that money could actually run out was a scary reality check. We determined that we would never find ourselves in a position where we didn’t have enough to live on for a sustained period. And so even on the meagre earnings, we started to set aside what we call “Deep shit money”. The target was to accumulate enough to maintain our lifestyle for at least a year.
“Control your expenditure”
I went from being a brand snob to a value brand lover. The realisation that no matter what the brand of toilet paper I used, its ultimate destination was down a toilet drain was a light bulb moment. Following this realisation, I started to review every single item of our household expenditure and I group expenditure into either asset or liability categories depending on whether the expenditure will earn me an income or cost me. In any case, any purchases I make must not exceed 70% of our income.
“Make your money multiply”
While lamenting on all the poor financial choices I had made over the years I determined that I would identify and pursue an activity that would provide a regular passive income. After a period of soul-searching, I settled on real estate. I became laser focused on educating and getting myself on the property ladder as an investor. I attended auctions, viewed lots of properties, negotiated numerous mortgage transactions all the while saving everything, I could spare towards the deposit required for a buy-to-let mortgage. By the time we had enough to buy our first buy-to-let, I had become a subject matter expert. My biggest learning in this period was that I had to set a tangible measurable goal to multiply my money.
“No man is an island, share & make room for more”
I have learnt that taking the eye off my problems and
helping someone else solve a challenge of their own can re-energise and bring joy and blessings. Several timeless quotes and proverbs reiterate this fundamental life principle. It has definitely manifested in our life that giving is like a planted seed that usually results in a harvest.
“Only borrow if you must & have a clear repayment plan”
In our home, we are completely averse to needless borrowing to indulge materialism. We believe in budgeting and the principle of living within one’s means. Having said that, I do believe that a certain type of borrowing is necessary if one is to acquire financial freedom. I apply the analogy of assets and liabilities to any borrowing decisions. The guiding principle we follow is that the cost of the debt must be lower than the corresponding income that the asset we seek to acquire will generate for example a good buy to let mortgage deal. Where this is not the case, I know to walk away from what we refer to as bad debt.
These 6 lessons formulate the MoneyMatiX virtues which have become the cornerstone of what we do at MoneyMatiX to help adults achieve financial wellbeing so that they can be financial role models for younger generations. Abiding by this set of healthy money habits has greatly improved my attitude and relationship with money.
PS: Hopefully you have found this article an interesting read it does not constitute any financial advice and is based on opinions & circumstances from my life.
Tynah Matembe xo
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