Get Serious About Your Money Mess
“I’m as mad as hell and I’m not going to take it anymore.” Peter Finch in his Oscar winning performance as veteran news anchorman, Howard Beale, in the film Network.
Do you feel in control of your spending, able to cope with life's curveballs and a sense that you're building a solid financial base? Or are you living payday to payday, wondering where your money goes each month? Would one unexpected expense cause a financial meltdown? And are you facing the prospect of working until you drop?
Many people live a rich life in the sense that they spend a lot of their income on consuming and acquiring 'stuff'. Income disappears in a succession of daily contactless card transactions and one-click online purchases.
Monthly debt payments for cars, credit cards, loans and 'free' mobile phones on contract consume a large slice of each month's earnings.
The Money Illusion
Outwardly, these people appear to be doing well. In reality, their life is built on sand. One wrong move and they risk sinking. They wonder where all their money goes and, deep down, feel guilt, shame and embarrassment at their situation.
We know that managing our personal money isn't rocket science.
Spend less than you earn.
Avoid debt.
Save and invest the difference.
But knowing and doing are two different things because how we use money is primarily driven by our emotions and deeply ingrained habits.
The Wake Up Call
The coronavirus pandemic has been a wake-up call for a lot of people. For some, the crisis exposed the precarious nature of their financial situation. While it made many others realise how much money they have been wasting and led them to reappraise what they value.
In my mid-20s, I had a similar wake-up call when I was drowning in debt, some of which was negative equity following the housing crash of the early 1990s. I was sitting in my dismal flat with my expensive BMW sitting outside. I had received a letter of final demand from my mortgage company demanding payment before legal proceedings.
I decided there and then that never again would I be chased by creditors seeking payment. Never again would I have no savings to fall back on. Never again would I be worried about where the next penny would come from. Never again would I be ashamed of the dire state of my financial position.
I created a plan to pay off all that I owed and build a stable income. It took me several years to get through the initial stage, but I did. And today, 25 years later, I have no debt whatsoever. I don't even own a credit card! I have savings, investments and paid work is optional.
Change is Hard
Humans are creatures of habit, and we find it hard to change our ways for the better unless the pain of not doing so is too much. People often give up smoking or change their diet or exercise regime because they have a health shock that jolts them out of their unhealthy lifestyle. The same goes for money.
They wait until things are really bad before they make changes.
But rather than wait for things to become truly dire, why not make changes now that will alter the trajectory of your finances for the better? Why not be different to everyone else and become more intentional about how you spend your money, build savings, and eradicate debt?
“Rather than wait for things to become truly dire, why not make changes NOW that will alter the trajectory of your finances for the better? Why not be different to everyone else?” Tweet This
The late Peter Finch won a posthumous Oscar for his performance of veteran news anchorman, Howard Beale, in the 1976 film Network.
During his show, Beale launches a tirade against all that he sees is wrong in society; from rising crime, economic recession and the loss of family values (sound familiar?). Beale implores his viewers to open their window and shout out "I'm as mad as hell and I'm not going to take it anymore." People can be heard all across America, shouting Beale's line from their windows. You can watch the 4-minute Oscar-winning scene here.
You Need to Get Serious, Not Mad
If your finances are a mess - or not where you want them to be - and you are sick and tired of living like this and giving yourself excuses, There is no need to put your head out of the window and shout like Howard Beale, but you do need to be prepared not to accept the status quo.
Read my 8 Money Milestones now, discuss them with your life partner if you have one, and work up a plan to make changes. Milestones 1-4 are the hardest, but they are also the most rewarding. If you want to make a breakthrough with your money, you'll have to suffer some temporary pain.
You'll have to cut back your spending, possibly work longer hours or do a second job. You may have to sell prized possessions like your financed car, go without holidays and live more frugally for a while. While you're getting things stabilised, as US finance guru Dave Ramsey says: “The only time you should see the inside of a restaurant is if you are clocking on to work a shift or deliver supplies.”
I've created some free tools to help you get started.
Above all, you need to be focused, determined and intentional. You have to be utterly determined to do whatever it takes to make ‘Never again…’ a reality. Once you get through Money Milestones 1-4, you can then loosen up a bit and start having some fun.
Don't put this off. Make the change to being better with money today. It will transform your life. I did it, and so can you.