The potholes on our roads can make driving a nightmare, and if you don’t hit your brakes on time or are not cautious of financial potholes, you can end up with a big hole in your torn wallet.

Gerald Randall, Group CEO at Old Mutual Botswana, says the same finesse we apply when negotiating potholes on the roads is equally essential for personal finances.

“Falling victim to financial potholes is common in Botswana because we tend to rely on credit to cover the gap between our paydays. Informed estimates say that the average Motswana earning about BWP 7,000 a month) spends about 66% of their earnings on paying off debt. So, we spend time trying to fill the financial potholes we have created rather than building a future”, adds Gerald Randall.

“Like traffic potholes, financial potholes appear when we buy stuff out of impulse and aren’t paying attention. We suddenly find ourselves in trouble, and it’s too late to avoid the resulting money crunch. Rather than face them, we try to move around the edges, knowing that tomorrow, the hole in our path will get deeper and our troubles even greater,” adds Randall. Skirting financial potholes requires several things. These include:

• Understanding yourself. Successful personal money management begins in the mind. If you know that you often bite off more than you can chew financially, then set up a budget that you can follow. Get rid of the cards and friends that make spending money easy, and if you need help, find it with a qualified personal financial planner. Most importantly, know your triggers and avoid them.
• Paying attention. It’s a fact that bad finances are often caused by neglect. Many people don’t have a monthly budget or know where their money goes. If you aren’t paying attention to your present, chances are that important things like saving for emergencies, retirement and having life insurance to ensure financial security and or risk protection for your family are also being ignored. 
• Know what you are worth. To calculate your net worth, you should add the value of your house, savings, retirement funds and personal property and deduct what you owe. Then, you can begin planning a future in which what you own is more than your debts. Knowing your worth goes beyond numbers; appreciate yourself and your values to the extent that you don’t need to spend money or live a particular lifestyle to validate who you are in society.
• Take time out to increase your knowledge about personal finance. The more you know about managing credit wisely and investing in your future, the better you will be with your money. Taking insurance to cover your debts can be a valuable way of ensuring that your family or partner does not inherit your debts if you are retrenched or die suddenly. “ Life is full of financial potholes. Those who avoid them are well-informed, responsible people who pay attention to the road they travel to achieve financial success. Just as important as preventing unexpected dips and ruts on a financial journey is coping when you know that a massive pothole is forming in front of you,” says Randall.
• Cut back on the extras and non-essential items. Avoiding spending on small luxuries that are part of your life can have great rewards.

 “The stress of being unable to answer your phone, avoiding creditors, and dreading knocks at the door pile on anxiety and complicates things. The result could be car and property repossessions and even a poor credit record that could ruin the chances of a better job; some employers do a credit check before hiring. Being aware that potholes are usually self-created and can be avoided altogether is worth the effort,” says Randall.