Dame Diane Robertson, retiring from the Auckland City Mission after 17 years as its missioner, deserves a well-earned rest. She received a gong earlier this year for services to the Auckland community. Her work in supporting families living in poverty and assisting the homeless brought her to the nation’s attention and their respect. She is adamant things must improve for thousands of New Zealand’s poor families. Not only in Auckland but in other parts of the country as well.
She helped prepare and organise her last Christmas lunch this year for over 2000 guests on Christmas Day. Dame Diane is reported to have said she always hoped poverty would disappear during her time as Auckland City Missioner. It hasn’t. In fact it has increased over recent years as families struggle to make ends meet. Comments from some quarters that “the poor should learn to manage their money better” are never helpful.
This may be true but why single out just the poor who might need lessons in money management.
Probably because they’re an easily identifiable group. Where and how they live sends signals. But some who have credit cards, including the rich and famous along with wannabes, they’ll be spending to the max at this time of the year. We should not assume they all have money management down to a fine art. Some clearly don’t. Many need help in managing their money too. If you don’t have much you need to learn to manage what you do have well. The same applies to those who have much. It’s all relative.
We saw that recently with the disclosure that Jonah Lomu died broke. I’m sure trying to stay alive is an expensive exercise. That, and being available to every Tom, Dick and Harry wanting a piece of you. This can come at the expense of the family and income.
I met a businessman from Australia recently who has been involved in providing financial literacy training to groups of people who need to get a handle on managing their money.
The organisation targets sports clubs, church groups and schools in low docile areas. Families within these groups are encouraged to learn together. See how they can get themselves out of debt, stay out of debt and set savings targets.
It can be done. A little like our budgeting services. But the Australian organisation has found that by learning together with friends and family who share the same interests, people seem to keep each other on the learning track. But like all things, habits, be it over spending or over eating, develop over many years and it is the unlearning that proves most difficult.
I remember years ago I had hopes of earning $50,000 annually. I thought if that day ever comes I’ll be in clover. When it did, I bumped it up another $50,000. That would really mean I had arrived. Exceeded long ago now, I recall what my accountant at the time would ask me “what the hell do you do with your money”. I suspect if David asked me that question today the answer would be the same. I just spend it. Not wisely maybe, but as it’s my money, I’ll do with it what I want.
But lately I have been thinking. Maybe I should wise up. I have been reading Warren Buffett’s tips on handling money. He’s the third wealthiest man in the world. If I’m going to listen to anyone about getting serious, and smarter, with my money then why not a squillionaire? He says to start early. A little late on that score – then again it’s never too late to start. Avoid the debt trap. Okay on this one. Be boring in your habits. Buffet has drawn the same annual salary of US$100,000 for decades.
Just think how much some US CEOs, New Zealand ones too, command and never deliver the financial returns for their stockholders and investors that Buffet does. Year in year out. He still lives in the modest house in Omaha, Nebraska, that he bought in 1958. I don’t know if I want to be that boring but it does show that he manages to avoid lifestyle inflation with his down to earth habits. The tip that impressed me the most was – invest in yourself. “Invest in as much of yourself as you can, you are your own biggest asset by far. A cruel twist of fate can strip you of your money or your job. But no one can take away the talent and skills you acquire.”
It’s probably one of the last things we think of – ourselves and the skills and training we acquire over time. Perhaps this is where the focus should be when starting to learn good money management habits. Know and invest in thy self-first. Good luck in 2016. I hope the year will be everything you want it to be.