Our money stories shape the way we think and relate to money

What is your money story?

Understanding your money story is the key to unlocking a new, balanced and healthy relationship with 
money 

Everyone has a money story.

Whether you say:

I grew up poor- we never had money

I grew up wealthy; my parents never talked about money

I have no idea how my parents made money

Our money stories shape the way we think about and spend money. In a perfect world, we all grew up with parents or guardians that opened up to us about finances, budgeting, saving, and overcoming particular hurdles. But, many of us did not. I think this is something that transcends culture, although there is always some degree of variation.

It is important to be able to tell yourself your money story. You can write it down or email me if you want.

Now that I am an adult, I think most parents and guardians did the best that they could do given their upbringing. While it is essential to acknowledge that some of our money stories are have caused some problems for us in how we deal with money, try not to judge yourself and your family too much. Acknowledge the stories, identify areas of healing or improvement, and begin small steps towards healthy money habits.

My parents heavily influenced my money story. My mom and stepdad were very open about money. Not the nitty gritty but they did share some necessary details about their decision making as far as it concerned me. I will share some stories that I hope will help you as you flesh out your money story.

  1. Living below our means

At some point in my life, I was stressing to mom that I wanted to go to a more expensive school. My school was not bad as far as academics went, but I was having my issues about what I thought was good enough. Anyway, my parents sat me down and explained that my tuition at my current school was manageable for them because they could pay for my entire annual tuition once without straining. Additionally, a reasonably priced education gave them room to provide me other extras like school trips, novels, toys, etc.

My parents explained that taking me to a fancier school – in my case, this lovely school called Peter House- would force them to cut down on other expenditures and they would always be anxious about managing the fees should their financial situation face a slight change. My dad was retired, and my mom ran her own business. Owning a business is incredible but in places like Zimbabwe, business owners deal with severe fluctuations in profits.

  1. Planning ahead for the big items

For my parents, it was always important to be able to pay in advance for big-ticket items. If I wanted to go on a school trip, I had to tell my parents way in advance, or I was not going. Their worrying created a bit of anxiety, and subsequently, I am a little bit obsessive about planning. My mom especially hated surprises.

  1. Being open to all kinds of work opportunities

My mom always emphasized that I am not above doing any job. My mom believes that when it comes to working, you do your best so that you can go home and live in relative comfort. My mom balanced running her business and being a trader in South Africa. As a trader, she was gone for months at a time and lived in less than ideal housing circumstances in SA, but it meant afterward she returned to her extremely beautiful and super comfortable home.

As a result, I am very comfortable doing any job. I have no issues, BUT that also means that sometimes I get stuck wasting time on random hustles when I should be out there strengthening my portfolio for the career I want.

Whatever your story is- write it down or think it out loud. Do you see some patterns that you need to change? What have you learned from your story?

 

 

 

 

License to Splurge

License to Splurge

License to Splurge

I don’t know about you, but sometimes I need a couple of my girlfriends, plus my husband and maybe mom to give me the go-ahead to spend on myself. There is all this advice that we should stop drinking coffee or eating avocados because those tiny expenditures will add up to a million bucks and before you know it you just missed out on being a millionaire. Crazy, I know!

What is the point of life and working hard if we can’t give ourselves little pleasures? I also learned that if we do not spend on ourselves, we become bitter. There was a time when it felt like every other phone call that I got from home was about bad news death, illness, broken down vehicles, etc. – and all of these things required money. A lot of the way I think about money is informed by my own experience living away from home at a very young age and doing so at a time when the Zimbabwean economy was in free fall. A friend of mine came up with a suggestion- she said for every western union trip we made we should buy ourselves something nice, ice cream or a dress.

So how do we splurge responsibly? Ladies and gents, I know you want to get your hair done, nails, get those nice running shoes, yoga pants, nice phone, bigger TV the list is endless. We all have things that we want. Here are a few ways that you can work towards splurging responsibly in a way that is in line with your goals and doing so without breaking the bank or diving into the emergency fund. I know that sometimes getting your hair done feels like an emergency, but it is not an emergency fund worth crisis, so don’t even think about it.

1. Make a list of your wants
2. Get a sense of how much you spend on your desires per month. I would suggest printing out your bank and or credit card statements from the last year and highlighting all the wants. If you use online banking, you can request these nice-looking graphs for your expenses. I did this exercise at the beginning of the year, and the results shocked me. I had not realized just how much I was spending on traveling.

You can break down to the merchant, which is nice. Doing this small exercise forced me to be very honest with myself about what kind of things I spend my money on and how I can make adjustments to those expenditures.

3. Set up a small budget for your splurge!  Yes, budget it in. If you know that you spend $20/week on coffee, then add $20 to your weekly food budget. Consider how your numbers change when you add in all these small things. If you suddenly find yourself over budget, then look through your budget and find places to make cuts. For example, if you are paying $26 for a gym membership that you have only used once but you ride your bike more then maybe consider canceling the membership and adding to your bike maintenance budget.
4. Save over time for bigger or costlier splurges like a vacation. Vacations are fantastic, but you do not need a vacation every month. I will write in a separate post on how to budget for holidays more productively.
5. Enjoy life a little 🙂

Sticking to the budget is HARD

Sticking to the budget is HARD

That is all.

My only saving grace this week is that I have no money in my easy to access checking account. I spent it all. I can not spend what I  do not have.

Being honest with ourselves is important. Sometimes sticking to those numbers and being faithful is HARD.

Image result for BUDGETING IS PAINFUL

How to set financial goals without losing your soul

Financial Goals

I realized that in my blog and almost every other financial blog, everyone is telling us to make goals, stick to our goals, evaluate our goals, but how do we make goals?

In this post, I attempt to breakdown the process of thinking about financial goals.

Practical tips:

  1. Create a monthly even annual budget
  2. Live within your means
  3. Pay off any debt
  4. Set up an emergency fund
  5. Contribute to your retirement funds/ start a retirement plan (even if you are in Zimbabwe!)
  6. Visualize the life you want
  7. Do work that keeps you happy (when possible – sometimes we just have to do what have to do)
  8. Spend on what you like
  9. Cut out any expenses that  waste your money and do not bring you joy
  10. Make charitable giving an integral part of your financial goals

I think about money as a vehicle for living the life that we want. A wholesome, happy life of giving, traveling, and doing the things that bring us (me) joy.

Before we get down to business, I would suggest doing a visualization exercise. Close your eyes and think about the life you want, where you want to be, and what makes you happy. Maybe when you close your eyes, you see a beautiful house, your parents with a car, a million dollars in your retirements account. It doesn’t matter as long as you are honest. I daydream a lot- my therapist says this is healthy. So there you go- I just saved you $150.

Step one:

Build your budget – we now write down our budget, so do this. This is worth repeating at every turn.

Step two:

Think about what you want – what are your five-year goals? Where do you see yourself in ten years? Thinking through these questions is how you come up with short and long term goals.

Your fixed goals should include living within your budget,  paying off debt, setting up an emergency fund, contributing to retirement and saving at least 20-30% of your income. After that, the goals you make are entirely dependent on the kind of life you want to live.

  1. If you are a student, you need to regularly set aside a small nest for after graduation to cover trips to visit friends, to support the family and additional health expenses (we have to talk about the cost of dental care -yikes) that might come up.
  2. If you have just started working you may need to furnish your home, get a car and or  you may be thinking about settling down, etc

Our financial goals change; this is perfectly normal. Do not stress when you find yourself needing to adjust some plans. Life changes, things happen, pause, assess the change, breath, and embrace the change.

Step three:

Do I need big purchases? What brings me the most joy? How well do you know yourself?

My husband and I are in our early 30s, so everyone we know is continually asking us if and when we are planning to buy a house. We also get asked a lot if we are planning on getting a new car. And about kids! I am not a minimalist or even planning to retire early, but I value financial independence.

  1. What is keeping you up at night? The things that keep us up at night should be at the top of our financial goals. For a while, debt was keeping me up at night – so I  came up with a strategy to pay it off and exclusively focused on that. Then organizing things for my mom was stressing me for a while, so I researched what I needed to do and dealt with that. Owning a house and or a bigger car has never kept me up at night, so it is not part of our immediate goals. What do I need to be happy? What kind of living situation would make me happy?

We would love to buy a house in the future (Because Boston- seriously who can afford a house here?).  We have learned that I hate commuting – I loathe it, BUT my husband prefers distance between home and work. As a result,  as we are thinking about home purchases, I might have to give up my dreams of a big yard for a home walking distance to work. Houses closer colleges tend to cost more money. We also have to be realistic about the timeline. It is a lot better to save at least 20% for a down payment. We also have to think about the various hidden costs associated with homeownership. Once you have considered multiple things, you can be honest with yourself about how much house you can afford and how long it will take you to raise those funds. There is no competition, so do what fits your budget and your goals.

We are all different: I love traveling. You love gadgets. She loves yoga. He loves driving a nice car. They love buying a lot of books.

I believe that money should enhance our lives. Access to cash should allow us to do the things that we love. Look at your budget – if you tend to spend $500 on books a month then think about how you can cut out the things that do not bring you joy and think long term about the things you love.

If you are not passionate about cars like me, then you can buy yourself something functional that you pay less for. My car is a 2000 Toyota. I have kept it well, and it gets me from point a to b. Since I live walking distance to work, I hardly drive. Everything I need yoga, church, groceries is within walking distance or a two-mile radius. If I bought a pricier car, I would end up spending a lot on insurance for no reason.

I have a friend who loves gadgets. They spend almost nothing on clothes and save for the newest iPad or headphones (I have tried out fancy headphones – and let me tell ya,  if I weren’t cheap I would get me some beats- also dear husband if you are reading this my birthday is today). On the other hand, I have had the same phone since 2014, and before that, I had last bought a phone in 2009. If it works, why change it. I like reliable brands that I can keep for a long time.

Do not spend money on things you do not value – that bring you no joy. I have stopped going to Marshalls because I would end up buying a lot of things that I hardly wear. I now buy clothes on a need to basis from brands that I like to wear.

I love traveling and going on vacations. I save for that and find ways to get to beautiful places within our budget. When we travel, I like to do touristy things – my husband would be fine sitting on a balcony with a cold beer, but he is a good husband so follows along with my plan.

Resources

Here are some of the top savings account options for your emergency fund.

I loved reading Dave Ramsey’s snowball method for paying off debt

Brainstorming life insurance

 

Diaspora, are you to blame for your financial misery?

Diaspora, are you to blame for your financial misery?

Some people have lived in the diaspora for years or what feels likes decades, and yet they look around and feel like they have nothing to show for all those years of hard work. Some people feel disappointed that they have been working all these years and maybe sending money “home,” but there is nothing to show for this either. Do you sometimes feel like this? I know I used to.

The truth is sometimes we are caught in a web of comparing ourselves to false standards that do not represent our truth. Before I dive into the hard stuff, I want you to hug yourself and say –

I am wonderful. I am not a failure. I have done my best, and I will continue to do my best.

Seriously, do this.

Ok- so the other truth is that maybe we find ourselves a little frustrated by our financial situation because we have not done a few things right. If you have been sending money back home for two decades and the receivers are still in the same situation or expecting you to keep remitting, then maybe your financial strategies need to change.

Over the weekend, I had some intense conversations on remittances. To be expected. My research and that of others studying remitting behavior across Africa, in Mexico, various Caribbean countries shows that on average, you diasporians are sending more than the average monthly income in your home countries. That’s right. You are sending between $200 and $500 on regular months. Then you send more for emergencies and other random events. You may be sending/remitting between 3 and 10%  of your income. Your money is making western union rich – Just kidding.

The reason that you are upset or feel some type of way is because it sometimes looks like you will never stop sending. A friend of mine said sending money home sometimes feels like flushing money down the toilet – ouch.

People will never stop asking for money so you, my friend,  have to decide how much you are willing to send, for what reasons and for how long you will fund that expense.

Those of you supporting parents probably have to accept that since many of our developing countries have an awful welfare system, you the children will need to be the buffer. That said there are things that we can do to not only improve the lives of our parents but also manage the financial bill.

So here are some ten things to think about

  1. Do your parents have a permanent home? In the village or the city- paying rent long term will cripple your finances. If you do not like where your parents are living, consider a long term investment in the type of upgrades that will make a happy place.

A year ago or so I spent some time at a cousin’s house in rural Masvingo and woow. Just woow – the house was better than most homes in the city, and everything was about 90% solar powered. They had a borehole and a water tank drawing water into the house. I had the best shower of my life.

I have seen friends who choose to rent when they visit home because their parent’s house is not up to standard for their diaspora kids. I have also had some friends extend and improve their parent’s houses in high-density areas. You know your situation best, so plan accordingly.

  1. Do you have a plan for access to food? I was having the food conversation with my inlaws a while back when mom in law jumped in and said you don’t have to worry about us for food. Also- just to say my mom in law is incredible, she raised five wonderful men. Three are still single by the way JMy mother in law, and many of the women in her area are farming on a small plot of shared land. She grows enough maize/corn to last them the year, sweet potato (which she exchanges for labor), and they have a yearlong supply for vegetables. Instead of buying them food we invest in agriculture inputs, and each year the actual bill has reduced as she is modifying her seeds. We have also come up with a long-term plan to subsidize her labor costs.

I know others who are engaged in small scale chicken projects etc. The goal is to keep things manageable and support something that people have already started. If the idea comes from the diaspora, it will likely fail. Organic projects have a long shelf life.

 

  1. A significant expense for diaspora folks is school fees for siblings, nieces, etc. In most cases where the parents are late, you may need to keep this budget item until the child has completed their studies. However, if the parents are living, you will want to try and engage them. This type of conversation is hard, but this is something I have been actively working towards. I no longer accept “the father is useless” as an excuse. If he is living and breathing, I will find him and ask him to take care of his responsibility even if this means going to court or engaging in DNA tests. I am tired of our cultures, giving a free pass to absent fathers. I  wish I had healthily engaged my relatives whose kids I supported  to see if we could come up with a plan for me to help them help themselves. It is too late for me, but I hope this is not the case for you.

 

You will also need to have a post-graduation plan. Will the kids continue to University, find jobs, or start their own business? It should be made clear early on that not earning an income is not an option. Budget an extra year of school fees to use as start-up funds for their next stage of life. It is also vital to foster the spirit of giving back while they are young.

  1. Stop with the building projects. If you have been sending money for the last decade to build a house that is still at window level, it might be time to stop. I used to think building scams were a uniquely Zimbabwean problem but alas from Capetown to Cairo around to Jamaica and the Philippines it is a universal problem. You may be better off investing in a home in your host country/new home country or honestly just saving your money.
  2. Budget your money – my favorite sermon on giving was when our pastor told us that God does not like disorganized giving. If you are not planning your giving, then end up in debt -what you have done? Listen to me on this. Been there done that and never again!  If you do not have – you do not have. Avoid financial emergencies by investing in small monthly payments for health care and funeral policies for key members of your family. Have an emergency fund but please stop creating crises for yourself.
  3. Do not borrow money to go home. Every year around Christmas, social media is awash with stories of folks taking out $5,000 loans to visit the home country. Look, unless you are going for a family emergency plan long term for the trip and wait until you have the money. Borrowing money with no way/ or resources to pay it back will make you miserable.
  4. Do not be a show-off. Stop using the money you do not have to buy gifts people do not want. Why are you clocking $3,000 on your credit card for t-shirts and sneakers? Does your 5-year-old cousin need jordans to know that you love them? Do you need to rent the flashiest car when you go home? BE SERIOUS –

This is also a message for me. I was the worst at this. I would spend and spend and spend unbudgeted money for gifts. People will be excited for 5 minutes before they start asking why you did not buy them this other thing.

Who are you trying to impress?

  1. Stop living a life you can’t afford. You are going home so now you want to spend $5,000 on new clothes? Look, I love treating myself but only if I have saved and can afford the new thing. In January, I did splurge a little on a new purse because I was feeling sad and wanted to cheer myself up. In my sadness, I still paid cash for it. I understand that sometimes we need a pick me up but not if that will make you miserable later. If you must- by yourself one special item and maybe don’t take it home. At our house beautiful things belong to everyone lol

Your family will not love you any less because you do not have the latest X item.

  1. Have you invested in your future? Do you have a retirement plan? Do you have a plan for if you get injured and have to stop working? What about if you get laid off? The western world is getting more and more expensive, and things do happen. We are human, not machines. When I interviewed nannies for a work project, job security was always a top concern. Many of our diaspora jobs do not provide a long-term cushion, so this is something we need to do for ourselves. Dear friend, please get yourself
    1. Life insurance – that covers death/repatriation and will live your loved ones, some cushion. Some even over disability cover
    2. A high yield savings account which can give you at least 2% interest
    3. Savings for at least five years after you stop working
    4. Invest in some technical training, an associate degree, or even returning to school full time. You are worth the investment
  2. Are you enjoying life?

The first time I went to England, my heart was broken as I saw the life of deep sacrifice that my mom was living to afford sending money home. I was hurt- deeply. I sent my mom $50 when I got my first paycheck- she laughed and said Pipo I am fine. I encouraged my mom to move into a nicer place and to start living a wholesome life. To take time off on weekends to attend church. To do one thing- just one thing that she loves. The people she was sending money to were living their best lives while her best life was being wasted in awful jobs and sacrificing joy. I speak to you as I would my mom – take care of yourself. Honestly, live in a decent place with heating. Buy healthy food, and you deserve that yoga class if that is your thing.

 

Diaspora do not be miserable

 

 

 

Remittances and Black Tax 2: Dealing with and Living with Black Tax

Remittances and Black Tax 2: Dealing with and Living with Black Tax

Now that we know that there are historical reasons behind black tax –  YOU  can  STOP blaming yourself or feeling let down by your parents. Anger and guilt can do a lot of harm to the soul.

First step: Develop an understanding of your financial responsibility

Before you even have the big talk with the family about money (these rarely end well) do your math. If your family expenses are not fixed, then try to go over your spending over the last few years – itemize each expenditure and cost, for example:

  1. Health care for mom $200 every month or 6 months
  2. Rent for the parents -$200 every month
  3. School fees for your baby sister and or  niece $1,000 a year
  4. Agriculture inputs for gogo $300/year
  5. Groceries for the in-laws $500

Even if you are married, I would suggest doing this first part individually, then comparing your numbers and expenditures. You can decide on a plan together later.

Second Step: Evaluate each expense and prioritize 

  1. Is this a necessary expense? If I do not pay for it, will it ruin someone’s life?

One of our favorite married couple mentors sat my husband and I down and asked us this question. Is this an expense that we need to be taking care of? Are you the only person who can take care of your niece’s tuition? What is the situation with the parents? If they are not late, are the parents in a position to make part payments for this expense or another?

  1. Rank the expenses in order of importance

You cannot cover every expense. You have to be honest with yourself about what you can afford and what you need to be paying for. If an expense is sinking you into debt, cut out other expenditures. You are the only one who can tell you an honest story about what it is that you can afford

  1. Cut out any frivolous expenses

My husband and I realized that we were paying for a lot of things that we shouldn’t have been. I also spoke to my therapist because one time I was feeling overwhelmed, and she said – people will never stop asking for money. You have to say no. I no longer give people cash for leisure trips. I cannot afford to pay for every church trip or kid’s school trip. I also no longer provide start-up funds for business projects because as my therapist gently reminded me – I am not a bank.

A lot of diaspora friends have lost a lot of money to half baked ideas that sink your money. But this is something that you need to decide for yourself.

  1. Decide if you are giving someone a loan or a gift.

Third Step: PLUG IT INTO THE BUDGET

Now that you know your black tax/remittance responsibilities plug the numbers into your budget and treat that number like any monthly bill. If the money you spend ranges from let’s say $100 to $500 then you want to set aside maybe $250 each month. THESE FUNDS ARE NOT PART OF THE EMERGENCY FUND. You know you will spend this much so set it aside.

If you are consistently going over budget, you will need to adjust some things in your budget to make this bill fit into the equation.

FOURTH STEP: Family talk (only and only if you need to)

If possible, you may want to have an honest conversation with your family about how much you can afford to give them each month.  I will write a separate post with a step by step guide on opening up this kind of conversation. It does not have to be a big thing, and not everyone in the family needs to know your plans. I discussed my ideas with my mom, and that was it.

LIFE HAPPENS:

Because life happens and sometimes, we need to spend a little more – I keep what I call a Zimbabwe emergency fund. I put in $30 a month in one acorns account just for this and minor emergencies.

I do not have a foolproof plan for dealing with back tax, and I still get shocked once in a while– please share your tips for a remittance/black tax survival.