Important lessons learnt during a six-month money makeover campaign

In just six months you too can change your financial habits with a little bit of planning. Picture: iStock
In just six months you too can change your financial habits with a little bit of planning. Picture: iStock

Over the past six months the Money Makeover candidates have learnt many financial lessons and have implemented these in their lives.

With the help of their Absa personal financial advisers, the candidates had to take a long hard look at their finances and put in place plans and mechanisms to help them build wealth and achieve financial freedom.

In their final video updates, the candidates share the lessons learnt over the past six months and how they are feeling. Their final letters have been edited for brevity and clarity.

READ: Meet the 2020 Money Makeover candidates

What Colen learnt

There were a lot of surprises I discovered about my financial status during the past six months. These included not knowing the exact amounts of the debt I was paying off; leaving money to idle money in my account without putting it to work; claiming back from the SA Revenue Service; and living without a will or an estate plan.

READ: What to look for when drawing up your will and estate planning

I have achieved my goals by implementing several strategies. These included curbing wasteful expenditure and increasing the limit of my emergency fund, effectively managing my property loans where I have paid off R50 000 in six months and making sure that any and all savings were taken advantage of, including installing prepaid meters on all the properties in my portfolio and reducing travel expenses.

Catherien’s breakthrough

My goal from the beginning was to be able to talk to my husband about finances. To be on the same page regarding finances has been such an impossible dream. When I heard about the Money Makeover challenge, I really believed that by doing this, maybe, just maybe, we could get to a place that we both clearly understood each other.

Today, I can honestly say that my husband and I are now on the same money page and we can have uplifting positive discussions about our finances. Our attitude towards the word “finances” has changed. It is possible and anyone’s finances can be turned around – you just have to start with the basics.

READ: How to talk about finances with your loved one

We now have various accounts with positive balances and no debt. I have to pinch myself to believe what we have achieved in the last six months – even with the Covid-19 coronavirus challenges we all faced.

Important lessons for Mishack

When the campaign started I sat down with my Absa financial adviser Johan and analysed my finances. We put in place effective financial measures. From that moment on, I realised that getting out of debt involves a lot more than just paying off a credit card.

It meant that I had to change my spending habits, draw up a budget, prioritise the largest debts, create an emergency fund, draw up a will and update my particulars on insurance policies and retirement fund.

It was tough, but the journey was an eye-opener. I had lengthy discussions with my wife on money matters, which made the process a lot easier.

READ: Are you making the most of your money?

I now have an emergency fund, something I never had before. I have an updated will and estate plan. I am in control of my credit card debt and have paid off R29 000 of a huge debt I had. I have also opened bank accounts for our three kids to create a future safety net for them.

Bellah turned it around

The Money Makeover campagin has helped me turn my financial hardship into a financial positive. I was making money through my construction business but I still could not afford my daughters’ school fees, while some of my policies and insurance contracts had lapsed. After six months, I have reached a milestone – by turning my business cash-flow to positive and paid off all the debts in my business.

READ: Turning a business cash flow positive

I have learnt to pay myself a salary and treat myself as an employee like everyone else. I am spending according to my budget and what I can afford. I have also opened a retirement fund, a disability fund and educational savings for my daughters.

I am free because I don’t have additional debts such as loans and won’t attempt to open them again.

Nono’s life-changing experience

The past six months have been life-changing for my husband and I. Everything we have learnt has brought us closer as couple. We became more open and transparent about money and what share a vision as a family where money is concerned.

This journey forced me to track every cent I spent and to my surprise, the “little/left over” money I had previously regarded as only spending money made a huge difference in paying off out debt. I have become more disciplined in drawing up and sticking to my budget monthly. I was amazed by how creative I got with the money I already had but wasn’t using effectively.

READ: Create extra income with a side gig 

My credit card is still open in case I ever need to use it. In order to accommodate any unexpected needs, I have started putting in extra cash on my credit card, so I don’t get back into debt or find myself having to pay interest. Now I have started paying off my car and my new goal is to pay if off by December this year.

Peter’s realistic budget

Before the Money Makeover process, our budget was theoretical. We had an idea how much we wanted to spend but would continuously overshoot that and rely on credit to get us through the month.

Between my wife and I, the new budget is much more realistic, and we are working as a team to make sure we stick as closely as we can to the budget.

Gone are the frequent trips to shops where we would just buy random things we liked. We now shop according to a meal plan for the week which has also meant our food wastage has been reduced substantially. We are also a lot stricter on not buying items just because they are on promotion even if they aren’t on our list.

READ: How to avoid the slippery slope of credit dependency

We decided to involve our kids as much as possible in our money matters so it could be a learning process for them too. We took time to explain the money makeover process, why we are doing certain things and even developing games to teach them about saving, budgeting and earning interest.

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