Angelique Ruzicka, editor of Justmoney, interviews well known personal finance journalist Maya Fisher-French who has just written a book called ‘Maya on Money’. The book offers practical advice about how you can manage your finances.
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Do you live by the advice that you share in your book?
We have taken an overdraft again since the last time as we needed a stop gap and we will be paying that off in the next month. But [in general] that’s our attitude toward debt. Our mortgage is the only debt we have.
We don’t take on debt. We don’t have a car debt, pay off our credit card in full and have a retirement plan. So yes we live as best as we can.
I can’t say that I don’t walk past the store on occasion and see a pair of shoes, and make an irrational purchase though.
My husband and I also have a budget for our date night where we eat out once a week. It is a big expense on our budget but it is important for us. It’s such an important part of our marriage that we do budget for it. We live within our means.
I also decimated the emergency budget money. We are a little bit out from the norm, but when you are building a house it is a huge expense. We had all these other unexpected expenses.
So I have my priorities: the emergency fund will be rebuilt and the overdraft will be sorted out.
The reason I am sharing this with you is that you can never stick to a plan and you got to try and get back to where you were before. I seriously don’t believe in overdrafts. After living like we did and landing in the trouble that we did it makes me extremely uncomfortable.
Also, right through the build and my sabbatical I kept up with my retirement funding. I wasn’t prepared stop with that.
If you could only give people three pieces of advice from your book, what would they be?
I think it would be to not take on any revolving credit at all, e.g. credit cards not paid off in full, overdrafts, etc. Revolving credit is very dangerous.
Definitely have an emergency fund. It’s the lack of emergency funding that gets people into debt in the first place.
The third one is: create a budget. One chap tweeted after reading the book that he started capturing how much he was spending day to day and he couldn’t believe what he was spending his money on.
We are at a stage where we are living within our means but when I see something going in the wrong direction I start capturing all the information to keep me mindful of what I am spending.
Not everyone has to do this but those that need to get their finances under control, should. But a monthly budget is important. We do a budget every month. But when things are tight we look at it even more carefully.
You talk candidly about the financial tough times you went through. What kind of lessons have you drawn from this?
We took action and I think that is the huge difference. It’s quite interesting to see people only dealing with their finances when they have to, instead of taking action earlier. What surprised me was how quickly we were able to get out of our debt.
Because once we took control and we started focusing on it, somehow things work out. I think that was the thing I learnt the most: It wasn’t forever. And we didn’t ignore it.
I was amazed by how accommodating people were when we contacted them to tell them that we couldn’t pay. Every single one of them agreed to a six month repayment plan. But it was a very hard thing to do as my pride is very high. I think they were so glad that they didn’t have to go down the debt collection route too.
The book is not about getting rich quick, but surely if you sort your finances out it can make you richer?
Absolutely. But it’s not quick, it is a process. What I often find is that [people do] debt consolidation on one end and forex trading on the other end. Some people don’t realise that sorting out their finances means sorting out the day-to-day stuff. And once you do, it’s amazing how quickly you do start having extra money to save and invest.
A lot of people don’t have the staying power. They last three months and then give up. You have to commit at least six months to a year to tracking your finances, writing down everything and sorting it out before you can get out of financial difficulty.
You offer advice about making (financial) cuts here and there. But surely there’s only so much we can cut back on?
Things are becoming tighter and tighter and we are not good at deprivation. But as electricity is about to go up by 25% soon more households will get to that [breaking] point.
There is something which is not in the book, though it should be there, and that is: to find ways to generate more income.
Part of that is just taking a skill that you have and using that to generate an income. For example when I go away there’s a woman down the street with whom I leave my dog with and she charges me R100 a night. She has three dogs at any one time staying with her and that would be R300 [a night] for doing very little.
So perhaps ten nights a week she has dogs that’s R3, 000 a month. Some people are also doing couriering on the weekends. It’s that extra bit of money that doesn’t sound like a lot individually but it can add up. All you need is another R1, 000 or R2, 000 if you are struggling to make ends meet.
Will there be a sequel? Will you write about how to get rich? Or something about share trading?
No I won’t do that. It’s not what I write about now. There’s a lot journalists writing in that space and there’s a lot of noise in that space. It’s no longer my speciality (before getting into journalism Maya was a trader).
I don’t have an interest in it anymore. I lived it and I am a bit jaded by it. I am more interested in the day-to-day running of money.
I have no problem with wealth but if your sole goal is to get rich I think there’s a disconnect in your life. To me money is about what it gives you. It’s what it allows you to do with your life. The next two books will be on ‘Marriage and Money’ and ‘Children and Money’. But who knows? We’ll see.
What do you think in general about how people in South Africa manage their money?
I think they manage their money like an ostrich with its head in the sand. A lot of people don’t want to think too hard because if they do, then they have to take action. South Africans have this strange idea that there is no future. I think that’s very much our legacy from the past. There’s a sense of ‘where do I put my money?’. Are we going like Zimbabwe? That’s the white South African mentality.
Then black South Africans haven’t seen wealth generation in practice. They haven’t been able to pass on legacies and building wealth [between families]. So it’s also difficult to imagine building towards something especially when you are trying to pull yourself up today and catch up a generation.
My university fees are paid for. I had parents that could do that for me whereas they don’t. A lot of issues in South Africa that do emanate from the history of this country and the future of this country. I think a lot of people also think ‘I don’t know what to do’ and then they do nothing.
Maya Fisher-French is the editor of ‘My Money My Lifestyle’, the personal finance section of national Sunday newspaper City Press for which she won the 2013 Sanlam Award for Excellence in Financial Journalism under the category of Consumer Financial Education.
For more about Maya and her book, check out her website, click here.