Why Day Zero is a lot like our finances

Day ZeroIn case you had missed the news, here in Cape Town where I live, there is a good chance water will stop coming out of taps on 12 April – “Day Zero”. Having watched this crisis unfold over the last year, I’ve noticed that there are such close parallels between the water crisis and how we manage our money. It seems that it is our intrinsic human nature to be incapable of fully assessing a future problem until it becomes a crisis – whether that be with our water or our money.

Capetonians have known for at least the last year that we were in a critical water shortage situation. Several months ago, we were told that unless we cut our usage to 87.5L per person per day, we would run out of water. Some people started to introduce water-saving methods into their homes, but the latest figures show that around 60% of people did not. They simply continued their behaviour, hoping that “something” would happen to change the outcome. As a result, we are in an even greater crisis and recommended water usage has been dropped to 50L per day.

How much money is just going down the drain, like when we let the tap run while brushing our teeth, because we haven’t checked what we are spending it on?

Think about the way we approach our retirement savings or even our debts. Despite all the articles and warnings about preparing for retirement, most of us only start worrying about our retirement when we reach the age of 55 and retirement is only five years away. In some cases, like those 60% who ignored the water cuts, people only worry the day they retire and realise there really is not enough money to live on.

When it comes to our debts, we keep borrowing and turning a blind eye to those rising debt costs until our next loan application gets turned down or we simply no longer have the money to service the debts.

And then, what is our reaction? We start playing the lotto in the hopes of winning, we make risky investments which often turn out to be scams, or we hope for a miracle like an inheritance from some long-forgotten relative.

Controlling your own destiny

The Cape Town drought is similar. People are hoping that the rains will come early, or that the desalination plants will be built sooner. Yet the simple truth is that, according to experts, “control over water usage is likely to have the biggest impact in averting Day Zero.”

This is an incredibly powerful statement. What it means is that we don’t have to rely on miracles. We can ensure our water supply simply by our own actions. We are in control. But that means making changes and having discipline.

It is the same with our finances. The best way to secure our future is to “control the usage” of our money. It is about paying attention to our money and what we are doing with it. Are we getting the best bang for our buck or are we doing too much unconscious spending? Like when we let the tap run while brushing our teeth, how much money is just going down the drain because we haven’t checked what we are spending it on?

I spent last week touching base with our Money Makeover candidates (you can follow them on the City Press website and in our #Trending Magazine) and all of them said that when they went through their bank statements, they were surprised at how much wastage there was. One of the biggest culprits was eating out and take-aways. Is that how we want to spend our money? Or do we have other goals for it like educating our children, going on holiday, paying off our mortgages or starting our own businesses? Are we literally eating away at our dreams?

So, don’t be like the many Capetonians who had their head in the sand. Avoid your financial “Day Zero”: wake up now, draw up a budget, check your bank statements and start using your money like a scarce and valuable resource not to be squandered.

This article first appeared in City Press.

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