Personal finance is the most neglected and so The Finance Story ‘Money & Me series’ features finance professionals who share their journey with Money. This is an initiative to learn from each other.
- Hi, my name is Zimkita Mabindla and I am a Chartered Accountant from South Africa.
- Growing up in a disadvantaged background, I was always curious about how money works, and reading books from a young age expanded my knowledge of how the world works.
- My career journey was tough, as it took me 12 long years to become a CA(SA) but the rewards of dedication and focus took me from a small village to a Partner at a Big 4 firm.
- Here is my take on money.
What does money mean to you?
Over the years money has meant different things depending on where I am in my life – from basic survival, to access to opportunities to access higher education.
From age 17, when I decided to take over from my Dad and work and study, money meant complete control over my ambition of obtaining the CA (SA) designation and the possibilities of a great career path and good earning capacity.
Currently, though as a divorced single Mom with one income to raise my daughter, it represents access for her to a better life. A life I wish I had as a child. Access to facilities, and resources that I only dreamt of as a child. In my household, money is the means for her to grow, develop and have a memorable early life. This means access to quality life experiences that will shape her childhood and set her up in her adult life.
So the principle I have adopted is to prioritize, growth development, and life experiences over material possessions without compromising the quality of my preferred parenting approach, which is quite hands-on.
The other impact on savings and finances of my parenting approach has been that I had to take a number of salary cuts or exit certain high-paying environments for lower-paying environments to look after my daughter.
How did your upbringing shape your attitude toward money?
Growing up, my dad, who was the highest earner, had extremely fluid priorities, when it came to investing in his family. His approach created a cycle of uncertain financial periods and vicious ups and downs.
My mom, on the other hand, earned a fraction of my Dad’s income, however, was always so focused on investing her money back into her children and family at large. To me, even as a child, she seemed to have a coherent vision of what she wanted for her children. Her approach provided a sense of certainty, safety, clarity, and comfort.
For example, uniforms, school books and anything that contributed towards our growth and development as human beings took priority over expenses for Christmas clothes, entertainment, etc. As a child, obviously, this was not a popular approach, but even then I recognized the safety, certainty, and comfort it gave us most of the time.
I have totally adopted my mom’s approach to money in every way, for my own education, growth, and development and that of my daughter.
How old were you when you started properly investing/ saving?
When I completed my diploma in 1997, times were callous and we had to survive. So, I put my CA plans on the back burner and focused on helping my mother and older sister financially to ensure that our siblings have access to basic and quality education. So, savings for a long time was not even an option presented as there was nothing left to save especially at the beginning of my career.
In fact, we lived from hand to mouth and borrowed a lot as our financial obligations and needs were coming up at us in every direction.
I could say I started saving after I finished my articles in 2004. Even after that, from time to time we had to dip into the savings to rescue or remedy life situations.
In South Africa, most young black people will resonate with what is referred to as a ‘black tax‘. Due to our past and our history, most of us have a mountain of family responsibilities when we start working, then we also mostly marry, someone with the same background and the same level of responsibilities. This creates a never-ending cycle of investing and disinvesting for many years. So I would say I started coherently saving in 2012 which is two years after I got divorced.
Are you a saver or spender tell us why?
I am both. I am a true accountant and auditor at heart, and therefore can be quite risk-averse. However, I do believe in living an enjoyable life, but I also acknowledge that there needs to be a balance to ensure some level of a certain, safe and secure life.
When it comes to savings, I have learned to be disciplined and stricter over the years.
I naturally am quite a generous person, a nurturer, and a rescuer so for a long time, I would prioritize other people’s problems and emergencies over mine. However, I have learned (the very hard way) that just because you give, it does not necessarily follow that people will do the same when you are in trouble.
For the past six years or so though, my biggest spending has been on my daughter through sabbaticals (2014, 2016) and career break (2020 to now) and since 2017, also her medical costs.
The biggest mistake you made when it came to money?
I don’t want to say I never made one. I will say, that the situation of having so many responsibilities and many obligations as soon as you work, created long periods of crisis mode management when it came to finances.
Building savings and then a life-changing event happens that has to be financed, then I would disinvest.
I think for a good thirteen years or so (I started working at age 19), I was on this rollercoaster. A lot of people’s lives were sustainably impacted in life-changing and positive ways by those decisions, so I am reluctant to call this a mistake. However, I acknowledge that I would be in a much better financial position had life not presented me with this kind of start.
As of today how do you invest/ save?
Since 2012, I have been saving at least 60% of any extra money I get, such as bonuses. I have had to disinvest to fund my sabbaticals to parent my daughter.
Eleven years ago, immediately after I got divorced, I invested in a house in order to provide my daughter with stability and a place to call home. I disinvested an endowment fund and paid a deposit of a quarter of a million Rands.
I also save as a priority 10 to 15% of my net salary every month without fail. I put that money in a fixed deposit account so that I am not tempted to access it.
Part of my investment strategy was two highly-priced Lifestyle policies a child / dependent benefit policy and an income cover policy. (I would still encourage especially single parents to proactively think about whether there are any insurance policies that might help them in these situations.)
Going forward, I plan to keep my costs as low as I have kept over the past year. That will allow me to save about 40 to 45% of my salary and I would recover the money absorbed by the career break in three years’ time.
(I have taken three career breaks, since 2012. It is quite costly and the current break has almost depleted my savings, as the break was not anticipated, but necessitated by my daughter’s health.)
So, strict discipline will be needed for me to live way below my means for the next three years. My daughter turns eighteen in three years’ time, hence the timeline.
If you had to go back in time and plan your finances, what would you do differently?
I would have been stricter about savings earlier.
I would have set stricter boundaries on helping others. Setting boundaries early on, in your employment/salary-earning journey is key to financial independence and financial prosperity. (I now set a maximum amount that I will use to help anyone on a first-come, first-served basis)
When your income increases do your expenditure increase?
Fortunately, I am not a person who invests heavily in material things.
Traveling and going out with my daughter is an area that probably increases as my salary increases. (I consider traveling and going out to be critical to her growth and development, I don’t consider this a luxury activity. So, I spend significant sums on local traveling and so far two international trips.)
Also, any spending related to my daughter’s basic needs and her growth and developmental needs would increase.
I love cars and currently drive a BMW 320i. If my income increases significantly, I would love to be driving a Range Rover Sport.
What advice would you give to other young professionals starting out?
Young women especially, I would advise them to be vigilant. Set boundaries early on at the beginning of your career.
Be strict and non-negotiable about the percentage that you will save.
Invest in yourself, in your growth and development, and increase early on your own earning capacity and potential. This is not selfishness, it is self-preservation. I contribute a lot of my career success to this strategy.
Be vigilant in expending time on activities that do not add much value to your earning and wealth-building capacity. This is especially true in black communities where it seems to be the norm for women to be celebrated for physical laboring rather than their earning capacity.
Freeing yourself from constant laboring ensures one of the most critical investments you will ever make toward your future financial health. Successful people always improve their knowledge. You can’t improve your knowledge if you are exhausted from physical laboring that adds little value to your wealth opportunities.
For instance: Hire help to do cleaning, cooking, etc as it frees up time for you to do activities like reading, investing in educating yourself, increasing your career advancement through listening to idea-generating and thought leadership content, attending professional activities, etc.
This is crucial as I believe it will be a game-changer in ensuring young women’s wealth and financial sustainability and that of their children.
