“I’m broke”, is such a common statement that we use when referring to the fact that we don’t have money. Very often, people use this statement casually. For example, when they don’t want to turn up somewhere or they don’t want to give people money. At the end of the month just before payday, people say it a lot, but at least they know that in a few days, things will be sorted out. That’s the painless version of being broke. However there is the other very painful one. Maybe most of your salary, even if you receive one, ends up servicing debt and you have very little left over for yourself. Maybe your business is going through challenges and you simply never have enough money. Maybe you lost your job or lost your entire savings. This is the painful version. It’s like a brokenness cloud that is constantly hanging over your head and you cannot see a way out. The pain is something we must go through but here are a few tips on how we can handle it better.
1. Don’t Spend Money Unnecessarily
This may seem obvious but when we are feeling bad, the temptation is to go and get something that makes us feel good. Something to validate us and immediately emphasise that it is not as bad as we think. So to do this, we tend to spend money that we shouldn’t be spending or even worse, money that we do not have. Very often the credit card will be swiped for that new phone, shoes, hairdo etc. Post-dated cheques will be left at the shop to enable us to replace part of our wardrobe. And we convince ourselves that what we are buying is part of the solution as crazy as that may be. Mary*, who was recently retrenched, found herself buying a new tablet the same day she got the letter. She knew she couldn’t afford it. The logical thing to do was to make sure she could stretch her resources as long as possible but there she was, in the shop, making this purchase. She told me that at that point, the conversation in her head was about how she was going to use it to be more efficient in job hunting. We feel better for a moment when we buy these things. However when that moment has passed it makes us feel really bad. It’s like a bad hangover. Not only did Mary lose her job she now had a fat bill on her credit card. Refrain from spending in this moment.
2. Don’t Wallow in Self-pity
At least not for too long. Allow yourself to feel bad, especially if it’s an incident that has just happened e.g. retrenchment. Denying the grief doesn’t help. However, you must start doing something at some point that is the opposite of how you feel (and this is not spending money as per the above point). Your bank account does not change by you feeling sorry for yourself. No matter how bad your debt is and how bad you feel about it, it will not change your debt status. Feeling bad will not get you a new job or new clients. Force yourself to do something different. If you hear about a real estate seminar, go for it. If you know somebody who has succeeded in a way that you admire, go have a conversation with him or her. The conversation is not about your debt or financial status, it is about learning from their experience. Albert Einstein said,
“You can’t solve a problem with the same mind that created it”.
This is about putting yourself in an environment where you can think differently. Most people get tempted to hang out with people who are in the same problem they are in. I’ve written an article about this in the past and I called it the Poverty Support Group. When you are broke, you want to go and have coffee with a friend who is also facing similar challenges. This way, you can feel sorry for each other and talk about how you have been victimized by the environment, bosses, banks etc. And whilst we are complaining about being broke we are usually doing the things that continue to make us broke e.g. having coffee, shopping or having a beer.
3. Do not Think and Act at the Level of your Bank Account
This is what we may have been doing our entire lives and that is why our bank accounts remain at the same level and why we are constantly broke. Tom’s* business this year has had its fair share of challenges and many of them are financial. He has not been able to pay himself properly for several months. Despite that, he is diversifying and starting a new product line to offer accountancy services to existing and potential clients. This decision has been made without more money in his bank account. He is recruiting someone to run this side of the business on the same lean bank account. Most wealthy people have at some point made moves that emphasise the fact that what they do is not limited by what they have. If they have one shilling, they still give themselves permission to think at the hundred shilling level. Even if you are broke, it does not mean that you are broken human being (Click to tweet this thought). The same potential, skills, talents, mental ability exist whether you have millions or cents. Just start using them. Being a student does not stop you from starting to think and apply CEO-like habits. Being retrenched does not stop you from using this opportunity to make a big career move. Being in debt does not stop you from figuring out how to create additional income. Your circumstances do not stop you from being more. BE MORE, today.
To learn more about wise spending, wise saving, fruitful investment and much more, click here to learn more about the Centonomy 101 (Personal Finance Training) program.
Waceke Nduati-Omanga runs programs on Personal Finance Management, Entrepreneurship and Career Success.