Old Mutual Malawi Financial Education Specialist Bernard Chiluzi has cautioned employees in the country to spend within their means as month end approaches.
Chiluzi sounded the warning after noting that some employees are ‘payday millionaires,’ making them venerable to ‘akatapila.’
Faceofmalawi reporter caught up with Chiluzi and this is what he said;
Month end is here now and that is where money problems usually start.
When you feel that you are trying to stop a financial flood with a small bucket while new money problems are flooding out of an open ‘debt -tap’, it is time to stop and take an honest look at what is causing your financial problems. The uncomfortable truth will probably be that your actions caused the flood.
A lot of Malawians are ‘payday millionaires’, and that’s where money problems usually start. We try to wear the “Big Boys” and “Boss Lady” titles in town, when we know very well that we live from hand to mouth. When it is month end, it is like a person cycling down the steep hill, you do not need a lot of effort. However, every steep slope can suddenly become difficult to navigate when situations change. You need to prepare yourself in case you slope up the hill. The only way to change is to understand that if you wish to do great things tomorrow, you must address today’s issues and take the steps needed to make them yesterday’s problems.
When that payday cheque hits the bank, it’s time for a celebration. For many of us, this means heading to the closest restaurant, spending the money while the going is good, and there is enough money for the luxuries we enjoy. The problem is that we do this while knowing that within a week or so, we are going to be struggling, as most of us our earnings do not overlap each other. You get your salary on 28th, two days down the line, the whole earned money is finished. How do you survive? Certainly should be through debt that end up eating your peace of mind.
When you reach the point when “akatapila” are on you just after payday and debt is making life unbearable, there is only one survival course available, and that is taking hard decisions and changing your lifestyle from the ground up.
Please consider the following survival actions:
1. Increasing your financial sources, you should allow your idle spouse to start income generating activities through which she/he could start contributing to other financial needs.
2. Realizing that those after-work drinks, the steak dinners and fancy whiskies are important but not a priority and opting to indulge in those forms of entertainment that you can afford. Forget being a payday millionaire and start the month as you would normally finish it. Counting the tambala and spending cautiously from the beginning and throughout the month will have immediate benefits. The “Katapila” debt will get smaller and the days easier to cope with. While you are on tracking your everyday spend, taking a lunchbox and your own refreshments to work will also help. Why not when this has also proved to contribute to eating healthy habits.
3. Selling that dream car, you couldn’t afford anyway, settling the outstanding balance and freeing up some cash. Remember, too, that no vehicle also means no more large insurance premiums, no more buying fuel and dreading the thought of how much the next car service is going to cost.
4. Downgrading your property or renting it out. It’s much better to let your bank help you sell off a house you can’t afford than wait for the property to be repossessed. Do not wait for the money lenders like banks to advertise your property for sale, it is an embarrassment. Get what you can out of the sale and move to a cheaper area. The ego may take a hit, but extra money in your pocket will make up for it.
5. Living in your own lane. Stop comparing your life with other people’s lives. They may be your workmates but that does not mean you understand their financial sources. Your friend maybe coming from a very rich family and you are not. If you like competition, be in competition with your own goal. That is a smart and rewarding competition.
6. Making sacrifices for your children is what parents do. But when the family’s survival is at stake, perhaps it’s time to be realistic about what that private school is costing you and seek alternatives.
7. Reducing costs by doing the housework yourself and buying cheaper brands. To help the process, ask yourself if you need something before you buy it.
8. Defeating those clothing and grooming addictions that make you feel good, but whose costs are adding to your sleepless nights. Achieve this by shutting down those unnecessary accounts.
Basically, stopping the flood from the wide-open debt tap means wading through the debt and turning off the tap. Only then can the mopping up truly begin.”
It is also important to realise that once the hard work is underway and recovery is on the horizon, the best way to stop repeating costly mistakes is to empower yourself, assume responsibility for your decisions and equip yourself with the financial education needed to create positive futures for you and your family. Live a life of investment and not a life of consumption.
