I was about 32 years old when our family faced a financial crisis. With the birth of our second son, we decided to buy a larger house with a bigger mortgage. Shortly after that, my husband and I both lost our jobs.
While my husband found a job a few months later, it paid a lower salary. I started to work as a freelancer with an erratic income. We did not adjust our lifestyle or spending habits and found ourselves in debt, living on a bank overdraft.
I had simply not been keeping track of our finances.
When I swiped my bank card, it worked, so I never really worried about spending money I didn’t have. It took us some time to realise the implications of our financial situation. This was a turning point in my life. I decided then to take control of our money.
Despite being knowledgeable about finances (I have worked in the financial industry since I was 23), and having the important stuff such as a will and life cover insurance in place, I had never created or stuck to a budget. Drawing up a budget that I regularly review changed the course of our finances.
Fifteen years later, we have no debt other than our mortgage and we are on track to achieve our goal of financial independence by the age of 55.
We enjoy life, eat out and have great holidays, but we spend and invest with purpose.
That said, keeping track of my spending and priorities is something I still have to work on regularly.
Although we no longer need to do a budget each month, we do check in every three months or so because the discipline always starts to slip. Financial discipline, like physical health, requires constant work.
I also find that when work and life get busy, I do not focus sufficiently on my investments by keeping them updated and on track.
So, the beginning of each year is a good time to do a general review of my overall finances and figure out what adjustments I need to make to stay on track.
My message for this year is that, even if you start late or have done all the “wrong” things, it’s never too late to turn your finances around. However, it requires action and a lifelong commitment.
Make this the decade that counts.