The biggest money MISTAKE I ever made ’

‘At its height, I had debt of R300 000’ – plus four other confessions from money gurus, showing that even the professionals can make mistakes. And hindsight makes experts of us all!

according to debt management firm Debt Rescue, South Africans collectively owe R1,64 trillion. Clearly, the debt trap is easy to fall into – and difficult to claw your way out of. Even the experts make mistakes. So in the interests of learning from them, we asked five local money gurus to confess their biggest financial sins and tell us what they would have done differently.

FALLING FOR STORE CARDS Kristia van Heerden, CEO at

Just One Lap and co-host of financial podcast The Fat Wallet Show

‘It all started in 2008 when I was sent a store card in the mail with R1 500 credit on it. At the time I was working part-time and earning only about R5 000 a month. I didn’t know anything about money management; it wasn’t a discussion we ever had in our household. So when I got this “opportunity”, R1500 was a fortune to me.

‘Not long after that I received another store card with R1 500 credit and I couldn’t just leave it alone. Of course, I ended up maxing out both those cards. And even though it was just R3 000, that debt was astronomical on my R5 000 salary.

‘When I got a new job and my income doubled, more credit was added to those store cards, and instead of being sensible and paying off what I owed, I maxed them out – again. This time, I also got a new car, and some crazy

bank was so impressed with how I’d used my store cards that they decided to give me a credit card, which I graciously accepted.

‘By the time I was 25 I had managed to get myself into a R100 000 debt hole and ended up paying way more than R100 000 because of all the interest, which at the time I didn’t understand or consider.

‘The strangest part of this story is that it was the best thing that ever happened to me. Paying off the debt forced me to educate myself and be disciplined; by the time I’d paid off my debt, my lifestyle costs had reduced dramatically.’

UPGRADING MY PERFECTLY ADEQUATE HOME Maya Fisher-French, finance journalist and author (www. mayaonmoney.co.za)

‘When my second son was born we decided we needed a bigger house with a bigger garden. So we bought a fixer-upper, with dreams of our children running around the huge garden kicking a soccer ball. It turned out to be a nightmare.

‘We went from a small, manageable mortgage to a much bigger one, massive upkeep expenses and huge renovation costs – and the worst part was that the boys hardly ever played soccer in the garden. It set us back almost R1 million.

By the time I was 25, I had managed to get into a R100 000 debt hole

‘We decided to move from Johannesburg to the slower pace of Cape Town, but even after all the renovations, no one wanted to buy a house with those kinds of costs. We rented it out for a while and eventually got a buyer, but we made a 20 percent loss on the sale.

‘It’s a problem that I think a lot of South Africans fall for: people rush into decisions without doing their homework. Before you spend you need to make sure you fully understand all the financial implications over time.’

NOT LOOKING AT THE BIGGER PICTURE Sam Beckbessinger, self-titled money dork and author (www. likeafuckinggrownup. com)

‘When I was 24 I had a job that I was wildly underqualified for, so I decided to buy a new car so people would take me more seriously. (My old Corsa Lite, covered in bumper stickers and reeking of cigarettes, was not helping me look like a grown-up.)

‘Having given this decision less thought than I would give to buying a pair of jeans, I stopped by a Hyundai dealership one day, and before I knew it, had signed up for more than R200 000 worth of debt.

‘It didn’t feel like R200 000,

We went from a manageable mortgage to a much bigger one, massive upkeep expenses and huge renovation costs.

because the very clever salesman kept me focused on the amount I was paying back every month, which I could just about afford if I squinted. By adding a balloon payment and stretching the loan out over the maximum possible amount of time, I thought I was getting more car for my budget. What I wasn’t seeing was that the R200 000 car was going to end up costing me more than R300 000.

‘For that amount I could have bought a cheap flat, invested in shares or a million other things that would have added to my wealth. Instead, I got a small ego boost that lasted about two weeks before I dinged the bumper and couldn’t afford to have it fixed.

‘It was a rough lesson, but now I know that if you’re buying something with debt, it’s important to look at what it will cost you in the end. And never let society pressure you into dropping a ton of money on something you don’t even care about that much.’

ASSUMING THAT MONEY FLOWING IN WILL ALWAYS FLOW IN Samke Mhlongo, founder and chief executive of The Next Chapter (TNC) Wealth Partners (www.tncwealth.com)

‘Just a year into my business, The Next Chapter (TNC) Wealth Partners, things were going so well that it didn’t even cross my mind that it wouldn’t always be the case. I’d landed a great contract and I thought it was a done deal.

‘I was going for Botox, fillers and just really treating myself

– it was like I didn’t know what to do with my money. Then the worst happened: the company I was working with went through restructuring and cancelled my contract. There I was, planning my life around bigger earnings and when they were gone, it was financially crippling.

‘I didn’t realise that my worth as an entrepreneur doesn’t depend only on my efforts – I am also vulnerable to what’s happening in the economy and to my clients. I should have spent more time living lean and understanding the cycle of my business, and I should have put away as much money as possible when business was booming to support the lean times.

‘South Africans are optimistic by nature and we tend to think the future will get better. So when we get that salary increase or promotion, or when we land that great contract, we think we’re only going to grow from there. Don’t get me wrong: it’s a great trait to have, but we also need to be realistic. Charge forward as if things will always get better, but save as if you’ll fail.’

I’d often go to a mall with a friend for a meal, then walk out with clothes worth R4 000 that I didn’t need, all paid for with my credit card.

RELYING ON MY CREDIT CARD Marnita Oppermann, money coach and author (www.mindfulmoneycoach.co.za)

‘Between 28 and 34, I started relying on my credit card to get through the month. I was working as an accountant, so you’d think I would have known better. It started while I was living in London but got worse when I returned home. A drop in salary saw me struggling to make ends meet on the lifestyle I’d become accustomed to.

‘I used my credit card to buy food, pay for medical bills, flights for travel and to splurge on clothing. I’d often go to a mall with a friend for a meal, then walk out with clothes worth R4 000 that I didn’t need, all paid for with my credit card. When I saw that I was getting into trouble, I asked the bank for help to reduce the cost of my card. They gave me a revolving loan and transferred the balance of my credit card.

‘Three months later I had maxed out both and doubled my debt. So I borrowed money from friends and family. At its highest, I had debt of R300 000!

‘It’s been almost four years since I last used a credit card. Tracking my carefully planned budget and thinking twice before spending unnecessarily have now become second nature. I now use my buffer fund, a small cash fund that I keep aside for unexpected expenses. It’s my emergency “credit card”. Unexpected expenses are a nightmare – your buffer fund will make sure you’re covered.’