Everyone uses money. We all want it, work for it and think about it. What does it mean to be successful? Is success defined by happiness or riches? Or are the two inextricably intertwined?
The truth is, you can love a job that pays very little, and hate a job that pays very well. But when you love what you do, you’ll naturally strive to be successful at it. You’ll work harder and longer, think more creatively, and do whatever it takes to get things done.
Motivation, the drive to succeed is derived from the passion one has for their work. In fact, according to Motivation-Hygiene Theory, pay loses its luster as a motivating factor after it reaches a certain level. Instead, pay can be characterized as a hygiene factor. This means that, while insufficient pay to meet even basic needs would make any job dissatisfying, increased pay beyond “adequate” levels does not substantially add to motivation.
Does this mean employees should be paid less? Of course not. What it means is that many employees value more than just a decent income when it comes to their jobs. Over time, they require other motivators, such as acknowledgement, opportunities for advancement, and enjoyment.
Organizations often focus on the bottom line as a measure of success, but it’s important to remember that, at the individual level, success is often about much more than money. And when an employer recognizes those motivators and does what they can to nurture them, they invest not only in the individual successes of their employees, but also in the success of their workforce as a whole.
I know it’s a hard pill to swallow and I know it’s obvious. But truly, money isn’t everything.
Comfort of Money
Sure, we all want to be comfortable and cared for, we want to feel secure in our lives, and money helps with that. The endless pursuit of money, the inability to know when enough is enough, however, can have the opposite effect on us. If all we can think about is money, if it consumes us, where is the comfort? Where is the security?
Similarly, unfettered spending can feel comforting in the moment but feel heart-wrenching when we look at our monthly statement or when we look at a cluttered house of items we never use. Where’s the happy medium?
Perception Of Money
We live in very difficult times when it comes to money, I think. Television focuses on those who have money, and we idolize those people who can spend frivolously. But it’s created a nation in debt. We overspend because we feel we’re missing out. There’s always something bigger or better out there for us to buy, something we just need to acquire. Something that will fill the void.
Look around your house, look at what you own, and think about your recent purchases. Do you own frivolity? Have you tossed money at a problem to see if it would go away? Retail therapy? We’ve all done this, we know it doesn’t work, yet we go ahead and do it again. Who can blame us? It’s what we know.
Spending Money
It’s the natural hoarder inside all of us, the little voice in our brain that tells us this thing, whatever it is, will be useful someday.
Maybe spending just makes us feel good, like all that time we spend acquiring the money wasn’t in vain. “This is a meaningful purchase because I worked for it.” Well, think about it.
Your money is your life-force. You spent your time acquiring it, you trade time for money. While time is infinite and shapeless for the universe, your time is not infinite or shapeless. Spending your money is spending time that is already past. I think that’s a pretty powerful sentiment.
Value of Money
What you place value in and how you utilize your money is important to finding meaning in life. Do you feel that the cheapest item possible, the item made of inferior quality goods and manufactured far away by people paid an unfair wage, is worth spending your money on? Is that how you want to define your own meaning? Do you feel spending money on something that isn’t any better or worse than a similar item, yet is more expensive because of a logo, is a good thing for which to trade all those hours? What exactly are you buying?
These questions are rhetorical and we shouldn’t judge others by how they spend their money because it is not our place to do so. But you, how do you feel about where your money goes? Is it meaningless or meaningful?
Money isn’t everything, despite its immense power in our culture. But that power is only what we define on an individual level. Being conscious of every spending decision, considering its meaning not just to us but to the person to whom we’re giving that money, is a way to honor money’s power and simultaneously control it.
Money’s power is indeed user-defined. If you control money, money cannot control you. The old adage goes “time is money” but I tend to think it should be flipped. Internalizing the idea that “money is time,” adding up in your head just how much time you need to spend to use a certain amount of money, will you give a different, perhaps a new, appreciation for how money is spent in your life.
Spend wisely.
Money Isn’t Everything, But It Is Something!
Is money really all that important? To some people money is the ultimate measure of success, to others it’s little more than abstract numbers in a bank account.
How important is money in your life? Would you put your entire life on hold for three years to launch a start-up a company or a business if it meant you had a good chance of ending up a millionaire? Would you live on GHC 2,000 per month in order to have more time with your children? I know people who have done both.
What would you do and how do you define success for yourself?
It’s time to start translating your new and improved prosperity beliefs into behavior; success requires both thought and action. Developing an awareness of what you believe about money and its influence on your self-esteem and life experience is the first step. Reshaping your money thoughts, by clarifying what you believe about money and working to shift those beliefs to higher ground, provides the groundwork for prosperity. Action, in the form of acting on the opportunities for prosperity in your life and using your money effectively, completes the prosperity equation. We will begin our work on the action section of the prosperity equation by setting financial goals.
Goals That Suit You
When you set financial goals, they need to be consistent with your non-monetary life goals. If the two are not compatible, then you will be in a constant state of internal struggle and frustration. Remember, money is the enabler to help you to achieve your life goals, not vice versa.
Each woman I met while researching this topic placed a different level of importance on money. Some wanted to amass millions, while others were comfortable living below the poverty line. The key to contentment is clarity about, and compatibility between, the way you interact with your money and your overall life priorities, whatever those priorities may be.
Maame Abena Agyeman, a part-time artists’ model and language instructor, values her personal time much more than she does material non-necessities. Her financial situation reflects this. In her fifties, Maame Abena Agyeman has raised three children primarily on her own but has never worked at a full-time, conventional job; instead, she focuses on minimizing her material needs. She lives in a very modest home, which she owns, and spends most of her time reading and writing. While her income falls below the government defined poverty level in most years, she is able to maintain control over her time, which she considers to be precious. Her financial goals fit her life goals and meet her most pressing needs.
Others, like 34-year-old Ellen Boabeng and her husband, consider it very important to save as much as possible early on in life so as to have greater freedom in later years. As she puts it, “We are very, very careful about what we buy and how we invest our money. If it means we don’t go on holidays each year, or that we go without new furniture for a few years, that’s okay, we’re happier that way. We feel comfortable knowing we are working towards our financial goals.”
“When we got married my husband didn’t share this attitude. He had worked in a family business where the business sort of supports you and you don’t worry about saving. When we got married though, I made sure we started saving in a big way. We used our savings to buy a house at east legon and paid it off in four years. It was our overriding financial focus at the time. We’ve now moved up to a larger home and are working hard to get it paid off. At the same time, now that we’ve started a family, our financial situation gives me the flexibility to stay at home and be a full-time mom. It’s a great pay-off from all those early years of frugality.”
To Ellen, money represents freedom from stress. She puts it this way: “When you have enough money in the bank, when you have that security, it makes you freer to choose what you want to do in life. For instance, if you just can’t stand your job you can quit. And even if you don’t quit, having the financial option sets you free. It just gives you more stability overall. Money problems aren’t wearing on you.”
Buy Yourself Some Freedom
Money can buy you a measure of freedom. If you have savings, then you have more freedom to turn down those things you don’t want in your life and take advantage of those opportunities you do want. You are more likely to be able to say “No” to a job you don’t like or to a relationship that isn’t working. If you have your financial house in order, then you are more likely to be able to say “Yes” to a dream travel opportunity that arises out of the blue or a steal-of-a-deal antique hutch you stumble across. Most of all, even if you never need to, or choose to, fall back on your nest egg, you will have the psychological freedom to think about your options in life more broadly and to worry less about setbacks. Regardless of whether or not you consider material possessions to be important, you should not underestimate the psychological value of savings. A little moderation now can create a lot of freedom later.
One Step at a Time
Learning to manage your money is like learning to run. A marathon runner starts running the same as all the rest of us, by putting one foot in front of the other. I started running three years ago with a goal of running for 15 minutes, three times a week. I worked my way up in additional five-minute increments. Now I regularly do hour-long, 10K runs and recently ran my first race. Maybe one day I’ll take part of our milo marathon race after finally reducing my two parks….hahaha, but that’s not what I was thinking about when I self-consciously gasped and sweated my way along the boardwalk during those first few months of running. Starting to build your financial health is just the same. It may feel awkward and painful in the beginning, but the most important step is starting, and the best way to run the marathon – or to retire with GHC 1,000,000 — is to put one foot in front of the other and get going!
Q: Does starting a business always require a big pot of money?
No. While you will need a few core ingredients to launch a business and then make a success of it, a big pot of money is not one of them. In fact, having substantial financial backing can actually slow or stop you from identifying your business’s problem areas and coming up with ways to fix them. In many cases, it can be better to start with very little money, since the skills you’ll develop as you overcome the challenges of growing your business will be invaluable — you’ll notice your mistakes earlier and adjust more quickly, which will make for a healthier company.
Let’s face it: Your first few attempts to start a business are not likely to go according to plan. I have launched my share of businesses that didn’t get off the ground, and looking back, these were useful experiences.
When I was a schoolboy I tried to launch a number of different schemes — for example, when my friend Bismark Amporful and I tried to grow and sell crops, but we lost our crop to hungry rabbits. It was disheartening at the time, but had we more capital to begin with, we would probably have made the same mistakes on a bigger scale, and we’d have lost more money.
So money can only get you so far. If you’re a beginning entrepreneur launching your first startup, a big pot of money may only mask problems that will eventually catch up with you.
From my first experience of failure I began to understand just how much I didn’t know about starting a business, and that even ideas that I thought couldn’t fail, wouldn’t necessarily work out.
And gradually, by making mistakes over time and learning from them, I hit on what became my key guiding principles: That you must only launch businesses that will improve people’s lives and that you are passionate about. You must try to create something different that will stand out. When things go wrong (as they often do), don’t give up — be tenacious. Try to be visible — it’s important to get out there and sell your product. Many great ideas fail just because their potential customers don’t hear about them.
I am thankful that my team and I are in a position to help other entrepreneurs find funding these days. The Startup Loans program doesn’t just provide sensible levels of funding, but also mentorship and advice for those who are given loans — invaluable insights from people who have been there and done it. In business, the best way of learning is through doing, so I always encourage young people to start a business over going to business school — it’s cheaper and you’ll learn a lot more about what it takes to run a successful company.
Entrepreneurship is a great leveler, since having the benefit of a wealthy background or a generous investor isn’t always an advantage. The wonderful thing is that money is not the sole currency when it comes to starting a business; drive, determination, passion and hard work are all free and more valuable than a pot of cash.
Answering your top five personal finance questions
Budgeting secrets
1. How should I track my personal spending?
The simplest way to track your spending, especially your cash, is the low-tech way, with a notebook and a pen. By carrying around the notebook with you, you can actually track exactly where every cedi is going—from a small coffee on your way to work to a spending splurge at the mall. If you’d prefer, on a daily or weekly basis, you can transfer your handwritten notes to a computer spreadsheet designed for you by GOY FINANCIAL
SOLUTIONS.
2. What financial reports should my family have?
Each family should spend some time tracking their financial progress, and the best way to do that is to develop a few financial reports that you’ll update monthly or semi-annually. These reports include a family budget and a balance sheet provided to you and monitored by GOY FINANCIAL SOLUTIONS.
3. When do I create and update my personal budget?
Individuals should start budgeting and tracking expenses as soon as they begin their first full time job. Revisit your budget every few months, and whenever significant life changes occur, such as raises, marriage, the birth of children, and divorce. GOY FINANCIAL SOLUTIONS provides you with adequate directions.
4. What financial professionals should I consider working with to help manage my personal finances?
If you find that you need help with your finances, professionals such as tax advisors, credit counselors, financial planners, and lawyers can help. Before working with any financial professional, be sure to check their credentials. You may choose to ask your friends and family if they have any trusted financial partners that they recommend. Ask specific questions about their history and areas of expertise. Finally, be sure that you are comfortable with the advisors you choose; ideally, you will be financial partners for life. GOY FINANCIAL SOLUTIONS is the right place to consult for your financial freedom dreams.
5. Why is a personal balance sheet important?
A balance sheet calculates your net worth by comparing your financial assets (what you own) with your financial liabilities (what you owe). The difference between the two is your personal net worth. Don’t be discouraged if your net worth is negative—keep in mind that this should be an accurate depiction of your financial situation. Setting goals is much easier once you know what your current net worth is.
Good money management can mean many things – from living within your means to saving for short and long-term goals, to having a realistic plan to pay off your debts.
