Sometimes you can get through life on common sense and willpower alone, but sometimes – often – you need to put someone else in charge. If you want to lose weight, some people can do it by eating less, while others need a dietician. If you want to go to the gym regularly, some people can get this done just by making their minds up, while others need a scary personal trainer waiting for them at the door at 5am.
And, if you want to get your overspending, lack-of-saving, too-much-borrowing financial habits under control, some people can do it simply by having a stern talk with themselves, but a lot of people need somebody else to run the figures and make the rules.
I fall into the latter. I need the help. I realised this when things started to get a little out of hand with my finances. I was going into credit to make it to the end of every month. I had a loan that I was paying back at exorbitant interest rates, even though I simultaneously had money invested elsewhere. Although nothing had changed drastically in either my income or expenses, small increases in every direction were adding up so that I just wasn’t managing to make it through the month anymore.
I know what I should be doing to fix my finances but it was applying my knowledge that was defeating me. So, I took a deep breath and called my bank and asked them if I could make an appointment with a financial advisor. They set one up for me, and I went in. I had a stern talk with myself in the car on the way there: absolute honesty was essential. I had to get everything under control, so I was going to tell this person everything he needed to know about my finances, no matter how silly or awkward I felt about it all.
The financial advisor quietly and calmly listened to the details of my situation. Then, he drew up a budget to work out my monthly expenses. I was able to list most of them off the top of my head, but he also printed one of my bank statements and surprised me with one or two payments that I had completely forgotten about – my monthly residents’ association contribution and DSTV, for example.
That was lesson number 1: Unless you write it all down, you’ll easily lose track of where all the money goes.
Then we looked at my expenses, and tried to think of ways to reduce them. Renegotiating my household insurance was an obvious step to take, but my financial advisor was more concerned about the amount that I was paying in interest on my loans and credit card. He calculated the amount that I was losing each month to interest repayments – not capital repayments, mind you, just the interest. It was a horrible amount – almost enough to account for my financial shortfall at the end of every month.
However, he pointed out that since I have invested money, it makes more sense to use that money to pay off my debts immediately than it does to keep it invested. He showed me that the interest I was earning on the investment was less than the interest I was paying on the loan – so I was in actual fact losing money every month.
That was lesson number 2: Pay back your debt first, because it has the highest interest rate (I knew this, but I needed to be told again).
And then we looked at all the other areas of my budget in which it might be possible for my family to tighten our belts. Food was the obvious expense that could be reduced, so we worked out how much I needed to cut back on costs each week to make ends meet again.
That was lesson number three: Set your budget at the beginning of the month and then stick to it.
I came away from my meeting with the financial advisor feeling empowered – and with another meeting scheduled in my diary to report back on my progress.
For me, that was lesson number four: I might know exactly what I should be doing – eating healthy food, going to the gym and doing a budget – but I’m the kind of person who needs the support of someone else, someone with authority and sympathy who will help me set my goals and get me to stick to them.
So if you’re like me, and you struggle to do it on your own, make an appointment to pop into your bank and see a financial advisor. It will make all the difference in the world.
Georgina Guedes is a writer, editor and content producer with a passion for reading, eating and travel. She has learnt a lot in her journey as a personal finance writer, and even manages to put some of it into practice! She lives in Johannesburg with her husband, two children, two dogs a cat and a white picket fence. You can follow @georginaguedes on Twitter.
The views and opinions expressed in this article are those of the authors and do not necessarily represent or reflect the views of 1Life or its employees.