Taking Care of Business (TCB) - Five money rules for Moms

Most of us want to have or earn or win more money. We believe that more money will be the answer to an easier, happier and stress-free life. Surprisingly, this is not the case.

Five money rules for Moms - Your kids are learning from you!

Most of us want to have or earn or win more money. We believe that more money will be the answer to an easier, happier and stress-free life. Surprisingly, this is not the case. Although more money may be helpful in the short term, if we don’t manage our money well, in the long term having more of it won’t address the underlying issues. That’s why so many lottery winners end up with no money after just a few months or years! Good, consistent money management creates financial freedom. 

Taking Care of Business (TCB) has been training people on how to manage their money successfully for over a decade, through their Me and My Money course. This eye-opening, life-changing course is now available to organisations and the public.   

Children learn their life-long money habits from you (their parents) 
TCB’s Reskill Programme Lead, Nicky Edwards, has trained over 2000 unemployed mothers on essential money skills. She says, “Money is extremely emotive, it makes us feel many different emotions like shame, guilt, anger and happiness. Most of the unconscious beliefs and emotions we develop around money – the way we think, feel and behave around money – are set up during childhood. That is why it is so important that moms create good money habits. Your emotions around money and how you deal with it affect your children’s future spending – and saving.”
 

TCB has outlined five practical things you can do to start your journey to financial freedom and ensure your kids learn from your good example. 
 

1.    Don’t bury your head in the sand 
“Money problems and growing debt can be overwhelming and make you feel sick and stressed,” says Edwards. “Running away from your money problems or trying to ignore them only makes things worse. Burying your head in the sand is not going to make your problems go away. Bad money habits will negatively impact your future and your children’s futures too; if you don’t face them head-on. 
“Even if you feel like running away and not facing your debt, or you feel ashamed of the mistakes you have made. The first step to becoming financially free is facing the truth. It is only when we face up to our current money situation that we can start dealing with it. Facing the truth is the start of your journey to financial freedom,” says Edwards. 

“Always remember that you are not alone when it comes to money challenges and stresses,” she says. “You’ll be surprised by how many people look wealthy but have mountains of debt and a lot of stress because of it. Even people from wealthy families can be ‘bad’ with money.”

2.    Find out what you’re spending your money on
To understand exactly where your money is going, commit to writing down every cent you spend for three months, says Edwards. “It doesn’t matter how small the amount is, write it down. We often believe that we don’t spend very much on small luxuries, like cigarettes, fizzy drinks, sweets and impulsive (or unplanned) buying. By writing down everything you do spend, you are likely to be surprised by how much of your money goes towards these unnecessary expenses,” she says. 

“Keep a small booklet and a pen in your handbag so you can jot down everything you buy as you go about your day. If you make the effort and record all your expenses over three months you will have a very good idea of what you spend your money on, this is the first step towards drawing up an accurate budget,” she says. 

3.    Make a monthly budget and stick to it
“Now that you know what you spend your money on, you need to draw up a budget with all your monthly expenses,” says Edwards. “Without a monthly budget, we have no control of our spending, like we are walking around with a blindfolded. Although your financial situation may feel scary, it is always better to take the blindfold off and face your financial truth,” she says. 
“Understanding what we do with our money is the beginning of really seeing our financial truth. When you draw up your budget, start by deciding what you need to spend money on, things like housing, groceries, utilities, transport – rather than what you like to buy,” says Edwards. “Make a list of all your monthly expenditure needs, don’t forget to add your debt repayments to this list. 

4.    Add your annual, unexpected and saving costs to your budget 
“Once you’ve got all your monthly expenses written down, add your yearly expenses. These are costs you only pay once or twice a year. Yearly expenses could be school fees, school uniforms, car license and birthday expenses,” explains Edwards.  
“Then add a list of unexpected expenses, things that could happen during the year, like a funeral or needing to replace a cell phone or a traffic fine,” she says. “Once you have your annual and unexpected costs written down, add these costs up and divide them by 12 so you know how much to budget for them each month. 

“Your short-term savings are these unexpected and annual amounts you have added to your monthly expenses. However, you should have medium- and long-term savings too. You should aim to have three to six months’ worth of expenditure as savings. Work out how much you need to save to have this amount and divide it by 12 to find out how much to put towards savings each month. You can save through a stokvel or using a fixed deposit bank account,” says Edwards. 

Add your annual, unexpected and savings amounts to your monthly budget. Work your total budget so that it is structured something like 50% needs (food, housing, water and electricity), 20% wants (entertainment, eating out) and 30% savings (retirement, emergency fund, funerals/weddings). 

5.    Learn to say ‘no’ 
It may seem overwhelming to have to stick to this strict budget you have set up, but it can be done. Firstly, set boundaries with friends and family who may want you to lend them money or buy things for them. Learn to say no. You must think of yourself and your children and take responsibility for your immediate family’s future first, says Edwards. 

“Also learn to say ‘no’ to yourself,” says Edwards. “Don’t buy things to impress your friends. Stop caring about what others think of you and start making good choices for yourself and your kids. 

“Don’t spend money on unnecessary things that make you feel better, this is emotional spending. Don’t buy that fizzy drink, those sweets or cigarettes, even if it means you need to give up things you think you enjoy – you will enjoy being financially free more than cigarettes!” she says. 
 

There is no quick fix

“Finally,” says Edwards, “you will need to persevere, there are no quick fixes. Learn to be patient and save for the things you want. Financial freedom takes time and commitment. If you stick to your budget and your plans, you will see that you can save.” she says. “You need to think about and plan for your future. It is never too early to start saving for your future.”

Join a Me and My Money Course to learn how to reach financial freedom, email Nicky Edwards at nickyedwards@tcb.org.za . Courses are run from TCB branches in Cape Town, Paarl, Durban, Midrand and East London.