If you’ve followed my story, you’ll know that I was in a LOT of debt at one stage and quite frankly I wasn’t even making it from one paycheck to the next. It was more like living from one paycheck to a week after. Some months it would be two or three days. To this day I don’t know how I actually made it through some of those months. Actually, I do: my institutional debt, and when that ran out, my family and friends. I owe them a cut of my investments for always funding me with R150s and R200s so that I could buy food, feed my son, get to work and squeeze in some food for myself. You’d be surprised just how far one can stretch R100. (To this day I look upon noodles with great disdain. Even fancy Thai restaurant noodles.)
I thought I should share 5 of my worst money mistakes (there were more, but you know…)
1. I didn’t save anything when I got my first salary.
What I should have done: I should’ve started then, when I was 18, to save. (Yes, I’ve been working since I was 18. Yes, I feel ancient.) I wasn’t earning a great deal, but saving R300 a month or putting it in an investment account would have been a wise move. Instead I…
2. Opened a clothing account. Someone said I should open a clothing account to build my credit record and buy nice clothes. I didn’t know any better so I listened. I started with one account, then got another one, then another… It didn’t go down well.
What I should have done: Started saving or investing. Got ONE credit card, used R100 and pay it back religiously. Maybe switch it up occasionally and use R50, or R150, and keep the fact that I have a credit card to myself.
3. I took a consolidated loan. I ‘robbed’ Capitec to pay African Bank whom I had ‘robbed’ to pay Edgars, Truworths, Foschini, ABSA, my rent, utility bills, son’s school fees, my school fees, family, family’s bills etc. It was supposed to be a consolidated loan, but my immediate needs took preference and I ended up not paying the accounts I was supposed to pay. A recipe for financial disaster.
What I should have done: NOT get a consolidated loan. I should have spoken to the companies (and people) I owed money to and negotiated payment terms that were easier on my pocket.
4. When I couldn’t keep up, I buried my head under the sand. I stopped answering private number calls and ‘087’, ‘010’ and any unknown number. I didn’t open my bills. If you a company I owed was lucky enough to have access to my bank account, they got their money. The rest were on their own. So I thought. Till they found me, at work. (They always find you.)
What I should have done: Faced my debt head on. It wasn’t going to go away and ignoring it only made it worse. Much worse.
5. Ahhh, pay day loans. Oh, these are the devil incarnate! The financial cup of iniquity, and I drank from it. Boy did I drink. I got SO drunk the bank had to stop offering it to me. And when they did, I had a crazy financial ‘crash’. It wasn’t the first, but somehow it shocked me to the core. There are certain things you just never get used to. Like this.
What I should have done: What Amy Winehouse (bless her soul) did – I should have said NO, NO, NO! I should have resisted the devil’s charms and lures promising me faux financial freedom and a little respite from all my troubles. I should have asked the bank to stop. I should have ignored it. I shouldn’t have…
At some point I turned to abomashonisa (loan sharks). I think that was when I’d hit rock bottom (or so I thought, because somehow I managed to go lower). A family member helped me with that one because I was too embarrassed to approach a loan shark by myself. I mean, I was a junior branch manager (at the time) and WHY would I stoop that low? I was desperate and full of pride (oh the folly of youth…)
What I should have done: Tried to find a second income source. I did this eventually, when I realised just how much trouble I was in because I couldn’t even pay my own son’s school fees and begging the creche for ‘a little more time’ was getting really embarrassing. So I decided to wait on tables.
There were many other mistakes that I made, but I think these pretty much sum up all that you should NEVER do when you start working. (How I avoided pyramid schemes is a miracle. At least I was smart enough to understand that those were a death trap). But consumer debt? I loved it, and it LOVED me so much it just gave and gave, and gave: gave more debt, more interest, more debt, and more interest, admin fees, collection fees. Truly an enviable love affair.