No silver bullet for debtless life

PROFESSIONALS CAN HELP YOU, JUST LIKE A DOCTOR MAY

Most South Africans love shortcuts. From illegal U-turns to cut a minute or two off a morning commute, to any number of supplements and pills and fad diets promising rapid weight loss.

With money and personal finance, it’s hardly different. People want quick fixes.

Having detailed in previous articles why I paid my house off 15 years early, and some ‘common sense’ tips on how to achieve this, I was approached via e-mail and social media by people looking for shortcuts, or “the secret”.

There isn’t a secret. I didn’t inherit any money that suddenly made this possible. I don’t work for a bank, so I didn’t have an ultra-low interest rate.

Another common comment was “I’ve tried but I have all these other bills to pay”.

The only “secret” I could offer them was: finding extra money to save or pay down debt will require some sacrifices. You certainly cannot, e.g. find an extra R1 000 or R5 000 or R10 000 a month out of thin air.

This means cuts must be made. Eating out once a week must turn into once a month, or once a month into special occasions only. These are easy. Far harder are choices with longer-term impacts, like your car and where you buy a house. There’s a fundamental difference between want and need – this is crucial for getting a grip on your finances.

The articles last week were specifically about why and how I got rid of debt by age 35. However, just because I’m no longer paying off a car or my house, doesn’t mean I’m suddenly financially fit or free. I must still worry about things like keeping up with inflation, ongoing savings, investments and retirement planning.

Debt is only one aspect of one’s finances. And perhaps this is why some people find themselves in all sorts of trouble, and why many are simply so overwhelmed by it all.

Admit that you probably need help, and get professional assistance from a qualified financial advisor. Financial health is surely no different from physical and mental health – and there we pay professionals.

Understand that any plan you create will need lots of discipline and focus to be successful. This isn’t something you solve in a month or two. Paying down debt takes months (in the case of smaller amounts) and years (larger assets/amounts). Saving for retirement takes decades.