Who does your money work for?

You will never manage money well or create wealth when all you do is work for other people (Click to Tweet this thought)  It will not matter how much you earn, inherit or are given it will ultimately go to other people if that has been your conditioning. At first glance, to some, that may look like I’m talking about working for others through a job. Most people use the phrase working for other people in that sense. This couldn’t be further from the truth. Many people who run their own businesses are also victims of working for other people.  This is really about who does your money work for?  Irrespective of where it comes from e.g. a job, a business, allowance or an investment who does it ultimately go to? The real beneficiary.  There is a graphical illustration we show in our classes.  We look at earnings in a year and start removing months based on who you are paying with your money.  For most of us thirty percent goes to tax. Tax is already three months of your annual earnings. Yes, you spend the first three months of the year paying for taxes.  Do the calculation and you will see.  There’s nothing we can do about that but vote wisely. It’s our bill for living in the country. It’s the rest that we have some control but unfortunately we still use it to pay the rest of the world.  You may find another twenty percent on rent or mortgages, ten percent on transport, fifteen percent on school fees and related expenses, twenty percent on food and household items, ten percent on other bills such as electricity, domestic help, water.  Then there is entertainment that can be another fifteen percent.  There are also other expenses such as relatives, phone expenses, internet, emergencies, and so on. Let’s not forget our debt payments  suffice to say we usually run out of months before we finish itemizing all our expenses.  Do this for yourself and see or send me an email to join an online platform to see this illustration.

When does this all stop? Never unless we make a conscious decision to do it. Will your expenses master you or will you master your expenses? (Click to Tweet this thought)  As you can see from the cycle it really does not matter what you earn. You can earn Kshs 50, 000 and be in this rat race.  You can earn Kshs 500, 000 and be the same but better looking rat race.  It’s still a rat race. Just the same way a rat never catches its tail is the same way you will never be able to live up to these expenses. There is always a better, faster, shinier version of what you have. Expenses will always go up. That’s not a surprise and neither is it the responsibility of your employer to keep up with your expenses. The transaction between you and your employer or you and your client is value based not personal expenditure based. The problem we have is that we have become prisoners of expenditure. We work for our expenses and hence our money works for expenses. Of course we do need to spend money but when all we do with money is sort out expenses then there is a problem. A problem that will never go away because the checklist of things one must do and items one must have is forever increasing. Success for many people is turning into what you can be seen spending rather than what you are actually achieving and that’s where the prison is. That’s where we become the servant of expenditure. We borrow rather than facing that we can’t afford it.  We overpay for convenience. We must have all forms of entertainment possible. More money automatically means a better place to live. And when we have that place we still want a holiday home. The car must be upgraded because that’s simply the thing to do.  I have a friend who was once pressured by his immediate bosses to upgrade his vehicle. This is how prisons are created. Don’t let other people’s prisons become yours.  It’s you doing the work. The we combine all these expectations with ignorance about where our money goes.  That’s a recipe for disaster otherwise known as poverty.

So what must we do? Become intentional about letting your hard earned money actually play a part in working for you (Click to Tweet this thought). This means thinking about what you want to achieve with the financial resources that are going to be put through your hands. Will you be completely satisfied with continuously having the latest phone, car, home furnishings, clothes?  If you manage to take your children to the best schools in existence will that do it for you? Are you covered if you travelled round the world on a first class ticket? Do you think that when you have all these things that outwardly project success is when you will be able to get your act together and make money work for you? Your hard work can’t be just about keeping up with rising expenses and social expectations. Wealth is what works when you are not working. Is a significant portion of your money also going to that or are you too distracted with the latest gadget? Also what impact do you want to have beyond yourself?  How do you want to help and are you making plans beyond that?  What is your legacy? As far as spending goes, what do you feel is valuable enough for you to spend on? There’s no right or wrong.  Making money work for you is intentional. It’s choices that you make and not luck. Take some time and think.  Who do you want your money to truly work for and what does that mean to you?

For more help on debt visit Debt Makeover by Centonomy on Facebook or email waceken@centonomy.com for how to enroll in a debt program.