Mapalo Makhu on Creating Healthy Money Mindsets
Mapalo Makhu, is a passionate Mother, Wife, Daughter and Founder of the award-winning personal finance company, Woman&Finance, in South Africa.
Mapalo Makhu, is a passionate Mother, Wife, Daughter and Founder of the award-winning personal finance company, Woman&Finance, in South Africa.
Ms. Makhu worked for various financial institutions before venturing out into this exciting field of personal money management. As a Personal Finance Coach and public speaker, she has shared stages and had audiences with some of the most respected public figures in South Africa. Ms. Makhu has appeared in broadcasts on eNCA, radio talk shows on Cliff Central, Classic FM, SAFM and has written for Destiny Magazine, the Mail & Guardian and others and is regarded as a Thought Leader in this area. She hosts a podcast and blogs regularly on personal finance and is passionate about financial education and financial intelligence for all. Ms. Makhu hosts talks and seminars in partnership with some of the most prestigious financial services companies in South Africa. She has also partnered with She Leads Africa to provide jargon free financial education to the public.
Ms. Makhu holds a BCom Finance degree from the University of Johannesburg and a Post Graduate Diploma in Financial Planning.
One thing that I think all of humanity, regardless of age, status, gender, nationality, religion etc., can agree on is that money is on everyone’s mind. Our lives are undeniably governed by money matters and yet, sadly, most people are financially illiterate. I invited Ms. Mapalo Makhu, the Founder of Woman&Finance to share some insights in this area in the hopes that the messages will resonate with you, our valued readers. Our interview, held at the Villa Moji at the Fairlawns Boutique Hotel & Spa, was reassuring on so many levels. I hope that you will benefit from reading it.
Due to the current economic climate, there’s a general feeling, I think, of lack being expressed by people in terms of their finances, what observations have you made about the money mindset issue?
I certainly think a lot of people are anxious around money, they are anxious when it comes to dealing with their money and it’s controlling them in a way. I’ll give you an example of a typical coaching scenario that I encounter time and again: someone close to retirement, typically exhibiting nervousness, anxiety and plain discomfort when it comes to discussing money, it is palpable in the room. And I often ask such clients if they’ve had the money conversation with their spouses and typically, the answer is usually NO. So even in our most intimate relationships, we are afraid to talk about money and face whatever situation is in front of us. This secrecy mindset strips us of confidence, it strips us of just knowing that we can be financially free, it really strips us of a lot. I think a lot of times people play hide and seek with money. They amass a lot of debt throughout, businesses don’t work out and yet, they don’t have real conversations about these. They get a bit of money from a salary and they are literally happy for only 3 days out of a month and then the vicious cycle continues. There is definitely a lack of consciousness when it comes to money, there is a lack of awareness and really facing yourself and how you deal with money and it is sabotaging so many people.
It is trite, when you read the literature, that the number one cause of divorce is money. So why in your view is there secrecy around money between two people who are supposed to be “One” and would this have roots in childhood perhaps?
I recently wrote an article titled, “The Conversation You Should Have Before Saying I Do” and through my practice and speaking engagements, and just generally engaging with the research, the pattern is clear: people hardly talk about the type of marital contract that they will conclude because it is seen as a taboo, it is as if it is implied that if we get married out of community of property it means you don’t love me or you’re going to leave me. Already the baggage that comes with just discussing the marital contract is immense, and if people could just start there, before even walking down the aisle by agreeing on the type of marital contract because, by default, people go with community of property and that has consequences. Then from there, you do not sit down as a couple and set out your financial goals for your marriage, you just assume that your love and bliss will carry you through and it will be happy times kumbaya and it never works out that way, ever.
People don’t talk about what kind of investments they will take as a couple, people don’t have constructive discussions around how the financial responsibilities will be split and so on. Instead there are a lot of uncommunicated assumptions e.g. the man will pay the bond and the woman will buy groceries and that is a very primitive way of thinking about money. People often don’t talk about what their financial goals will be, for example, by the end of the year how much debt, will we have paid off if we have it? So those active steps are missing, people are afraid to have those conversations. So, you see, right at the start of marriage, people will not be honest with each other and it starts with the wedding planning itself. People want exquisite, extravagant things, parents demand this and that for the wedding and there’s just so much pressure and the discussion that is not front and center is: how much can we actually afford and where is this money going to come from? Already you’re starting your married life off on the wrong foot unfortunately. When I was planning to get married, I sat down with my parents and gave them our wedding budget and said, “you will have to foot the bill for anything exceeding this budget if there are certain things that you want around this wedding”, because we were adamant that we were not going to start our lives with debt.
As a child you are learning from the grown-ups around you, so if the adults around you have never had financial education, are not financially literate and have never had empowering discussions around money, clearly what you will absorb is scarcity. We grow up with all this mess around money, a whole lot of baggage, and we go through life not counteracting these negative messages. And people say to themselves, I need to work harder, I need to go get more degrees so that I can make money, but nothing changes because you have not changed your mindset, you have not changed your habits, you still struggle because the bottom-line is: you have not learned the principles of Financial Management, so you are still left with nothing.
Indeed, most times we don’t feel we have control over our finances, so in terms of mindset what would you highlight in terms of taking control in this area?
I always say that money management is not difficult, it is not hard at all, we are often standing in the way of our own financial freedom and I must emphasize that financial freedom means completely different things to different people. For some, it means being debt free, not having credit card debt and overdrafts. For some, financial freedom means having a salary that can sustain them and they can still give, save and invest, and spend. And that is my basic formula: you must give, you must save and invest, and you must spend because you are working and there must be enjoyment in the money. However, often what people do is they put instant gratification at the top of their list of priorities and truly I see this in a lot of Black people. Because we grew up without having much, there is now this expectation from our society that you must look a certain way, you must drive a certain car, or you must live in a certain suburb and the truth is: people are dying. And what I am saying is nothing new, there is absolutely nothing new about what I am sharing but things haven’t shifted much in terms of our mindset and our approach to money as people and I think it’s because people are not self-aware, they haven’t accepted where they are and are not working towards any coherent financial goals because they have fallen into these societal expectations traps.
I will give you an example, when my husband and I were trying to get our lives together in the initial stages, I said to myself, I will not have a life like everybody else’s and we took a decision and moved back home to stay with family. Because of that conscious decision, we put our place up for rental and we were now able to save and invest what we had been paying towards our bond. People were aghast, and would exclaim, “oh my goodness, you’re moving back home?” But what they did not realize was that this was a short-term sacrifice for a long-term view. In fact, the word “sacrifice” sounds painful doesn’t it? So perhaps a more encouraging term would be “delayed gratification”. We delayed gratification because we had a bigger, long-term goal in mind and it was worth it because of the returns that accrued from our investments.
So, often, people caught up in these traps simply cannot make decisions like that, they are afraid of what people will say. When I was pregnant with my son, at social gatherings for example, I would be routinely asked if I was going to get a bigger car and, at that time, I was driving a fully paid up Chevy. And my response would be, “get a bigger car for who, this baby will not come out of my womb being bigger than me and now I need to get a bigger car for them?” They’d say, “no but when you travel with the baby there’ll be so many things, you’ll need more room” and my response always was, “trust me, he will survive!”, and boy did he survive in that small, fully paid up Chevy.
What kind of internal work did you have to do on yourself to prime yourself in such a way that you simply did not succumb to all these pressures?
When I look back on my life thus far, I realize that I have never been a people’s pleaser, and I am also quite stubborn, so how other people are living doesn’t bother or pressure me. And my upbringing played a significant role as well. In terms of my childhood, the game changer for me was at the age of 8 or 9 when I was repeatedly asking for this and that and roller skates especially were the thing at the time. My Mother was the sole breadwinner because my Father was in Australia furthering his studies. So, after repeated demands from me, one day, she sat me down and gave me a tutorial using her pay slip, I mean, step by step, including all the household expenses. There were 5 of us in the house and I did the Math and realized that, eish this woman is broke! How does she even do it? And I started being more considerate regarding the things that I wanted and later that year when she said, “okay, let’s go and the buy roller-skates” I said, “no, actually I don’t want them”, and I just started putting money away consistently. My brother would sometimes come to me and ask for taxi money and I’d say to him, “make sure you bring R5 back on top of what I’ve loaned you”. So, there I was, now a little moneylender simply because I was now just so money-aware after my Mother sat me down and introduced this culture of “money transparency” to me. Transparency with your kids and loved ones is absolutely important.
I also couldn’t go to Varsity immediately because my siblings were already in higher education and, it was not possible for my parents to afford those kinds of fees for all of us at the same time. So, in that gap year while I waited my turn, I started reading all this literature on investing and financial management and it deeply resonated with me. I read everything from Robert Kiyosaki to Suze Orman, and many others, and I just knew that this was the world I wanted to inhabit. I even changed my application, which was initially to do Media Studies at Rhodes University, to a BCom Finance at the University of Johannesburg. I even wrote a note in one of the books at the age of 18, “I am going to be the Suze Orman of Africa” and I still have it. It was a transformational time for me and I knew that this was my life’s purpose one way or another.
Another pressure is the Black Tax phenomenon in that there’s this expectation that those who’ve managed to emerge from poverty in the townships and rural areas of our country by studying or starting successful businesses will now support everybody else in the extended family. So, we are not transparent enough in telling the family or extended family that, “Listen, I cannot afford to sustain myself and all of you at the same time and this much is all that I can spare”. There are also feelings of guilt and shame in those scenarios around not being The One to rescue the whole clan and people end up being deeply mired in debt. There’s also an element of ego and pride, the “I have to show them” mentality, and meanwhile, it is simply not sustainable. You need to breathe and give yourself a chance; it is easier to help other people when you’re okay, you can’t honestly pour from an empty cup. Also, whoever you assist, keep them accountable and help them to start their own streams of income independently of you.
In closing, what would you like to say to South Africans, and other people in our global audience, who may be struggling financially and those who’d like to take responsibility for their financial well-being?
We are choosing to be happy for 3 days out of a month and the rest we are just miserable. This is debilitating on so many levels and poisons other domains of our lives, but the key thing to remember is that these are all things that we can absolutely change and control.
I think a lot of the time people are disillusioned, they think they can have it all and have it now and inevitably it all ends up in disappointment and plain bewilderment. So, to all people who desire to get their money management act together, let’s please start by accepting that we must delay gratification and that having a solid financial plan when starting out in our working lives is in our best interests. Self-awareness, and not succumbing to all these pressures out there, is also key. You must realize as a human being that you have complete and absolute abundance regardless of whatever dire financial circumstances you may be currently facing. The truth is, starting with your mindset, you must work for financial wholeness and security for your kraal to be full. We should avoid, at all costs, putting scarcity out into the Universe by routinely saying negative things about our finances or financial prospects because that’s what we will receive back. Sometimes we feel that we don’t even deserve to have nice things and that can play itself out negatively in terms of our personal finances.
Here’s something that young, upwardly mobile Blacks in South Africa must internalize deeply in my view:
For most of us, coming from the backgrounds that we come from, we cannot afford to start out leading lives of absolute luxury. Even if one was born into a rich family, that shouldn’t imply a life of wastefulness either, one should still be a responsible custodian of whatever generational wealth may have been left to them. I see a lot of young people falling into these traps, they want to be seen with the latest and best of everything and it really robs them of a financially secure future. This huge contradiction between the lifestyles that people are portraying to the outside world and the reality of their financial situation is simply not sustainable and it deeply affects their well-being. Some people can’t even handle social media because of some of the lifestyles portrayed there, I say switch it off completely if you feel pressured by it because half the time, what is on social media is not even real.
Let’s keep ourselves whole within, let’s remember that we are enough simply by virtue of being human, then the technicalities of personal money management will land on very fertile soil and we’ll all be the better for it.