Yesterday I helped my son put together a jigsaw puzzle with one of his favourite cartoon characters. If you have ever tried working with a jigsaw puzzle, then you know that the easiest way is by putting together the borders first. These boundaries than guide you and once they are up it is easier to then fill in the rest of the puzzle pieces in the middle. The borders give you some semblance of control and order as you work your way through the rest of the puzzle. When you have the borders up it is easy to then tackle one area at a time. For example you can now see the pieces with the right colours or images that align to a specific section or corner of the jigsaw puzzle.Then as you continue putting pieces together, the image becomes clearer and you even start working through the puzzle faster because you keep getting more clarity along the way. There are times I have tried to cheat the system and start working my way from the middle. I end up extremely confused and it takes a really long time. As I worked on this puzzle with him I started thinking about how our financial lives are similar to a jigsaw puzzle. There are so many things that need to be put together. So many products that are being thrown at us that sometimes we get utterly confused. Sometimes even the people who we rely on to guide us are just as confused as we are. So we end up trying to work from the middle and going round in circles. There are some of us who are aware of all these different pieces that need to be put together. However we just get overwhelmed at the thought so we simply do nothing. We rely on the unspoken hope that one-day, something unspecific will just fall on our laps and sort out the mess that we know is building up.
When you start working on a puzzle you have seen the picture. It’s usually on the box. You may not know yet how to put the pieces together but you have seen the picture. Have you seen the picture of your financial life? What does it look like or what do you want it to look like? It doesn’t matter if you do not know exactly how to get there, you just need the picture. Remember the fun in puzzles is not in knowing how to complete it but taking one step at a time and building along the way. Sit down and first figure this out. You may amend it along the way but there is something you need to be working off. When you are building a puzzle you continuously keep looking at it to guide you. That’s what the vision you have for your money will do. What are your goals or objectives?This will be your reference point. Next we have to create the borders or boundaries. In other words the structure that will support the vision. Just like the borders of the puzzle gave order to the process, we need order in our financial lives. Firstly do you know exactly where everything that pertains to your financial life is? Your bank statements, balances of your outstanding loans,value of pension, titles to property, registration documents for your business etc. If you do not then your first point of order is putting this together. Buy and keep a hard copy file if you have to and collect all relevant information. This information will help you face the man in the mirror and get to the truth about your financial status today. What you own versus what you owe. Next get to know how much you are spending and on what. Contrary to popular belief budgeting is not about limitation but rather about creating awareness so that you have the ability to make choices. You cannot save or invest without the knowledge of where your money goes. You cannot plan for school fees. Your big dreams will not come to pass if you are already not disciplined with the little you have. If you do not know how much you are spending today means you will not even have an idea of the money you need to make. The last structure I want to mention today is time. I had put aside time to complete the jigsaw puzzle. We also have to put aside time to work on our finances. This could be research, learning something new, keeping up with investment trends, creating new business opportunities, networking, updating financial records etc. We have to be conscious about how we spend our time and if we giving ourselves enough time to work on the big picture. If all your free time is being used up watching TV, then you have to balance this. Depending on your vision there are other structures that can work for you as an individual such as having someone you are accountable to. Put in place whatever frameworkyou think will aid you in achieving the big picture.
Then we can start putting pieces together. Just like in apuzzle you may decide to start with the blue pieces or particular image in one corner, you can decide to start with your expenses. Once you have the structure you will see a starting point. Do not try and see how the whole picture comes together. Just trust the fact that you have somewhere to start. Maybe you have ben struggling to pay fees every term but from your budget you realise you are spending too much on entertainment and you can save more. The first piece may just be opening a savings account and place this money there. As you start to save more you can spend time researching on other opportunities to grow your money. You could invest in shares, property, business ventures etc. that are part of the pieces towards putting your bigger picture together. Whenever financial information, opportunities or information on different products is being thrown at you, you can filter out what does not fit into your bigger picture. As you network you find that you can pool your resources with 10 people who have similar objectives to yours.As you start understanding how much time you have at your disposal you then know which investments you are willing to manage directly and which ones you want to outsource to professionals. Just like in a puzzle sometimes you place apiece that you think fits in a particular area only to realise that it doesn’t. You remove it and try something else. Nothing happens perfectly. You will make mistakes but you learn from them and keep going. As you engage in the process consistently you start seeing things clearly. You become more knowledgeable in a particular area, sharpen a skill, get access to more financial resources and you realize that you are now being able to move faster and with more clarity. Think of your financial plan as this jigsaw puzzle and start putting it together.
Waceke runs a program on personal financial management. Find her at waceke@centonomy.com|
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