Home' Trinidad and Tobago Guardian : January 12th 2017 Contents BG16 | FINANCE
BUSINESS GUARDIAN guardian.co.tt JANUARY 12 • 2017
In 2017, focus on you
This year has begun with lots
of trepidation for those of us
in T&T. There are concerns
about the labour market, the
shortage of US dollars, the
strength of the economy and
whether we can end 2017 in a better position
than we started.
Last week I dealt with the global uncertainty
in the financial markets due primarily to the
changing political landscape in the United
States, UK and Europe and, of course, this
global picture compounds the uncertainty
on the home front.
While major countries around the world
will be ushering in a new political dynamic,
our political landscape changed in 2015. This
means that 2017 is pivotal for T&T since after
15 months in office the time to deliver on the
promises articulated in the run up to the 2015
general elections is now. It does not take any
rocket science to come to this conclusion.
An administration is for a term of 60 months.
At the end of 2017, 45 per cent of the time-
line would have passed. With it, the time for
implementation of various policy initiatives
would also have gone leaving the remaining
30-odd months as the period during which
measures should bear fruit and planning for
the next election cycle should commence.
The trepidation that most people feel comes
from the fact that, at the start of the year, there
is little clarity as to what those multi-year big-
ger picture policy objectives are and how they
are likely to impact or even transform our lives
from 2018 and beyond.
There have been many suggestions and com-
ments on what needs to be done, what should
be done and how it should be done. I am not
going to deal with that today.
To quote George Bernard Shaw: "If all the
economists were laid end to end, they'd never
reach a conclusion."
My point is that because oil and gas prices
have fallen we have spent the better part of the
period discussing the policies and adjustments
that need to take place. However, whether we
agree or disagree with the existing and pro-
posed path there is little the average person
can do to change or affect the course of action.
The Government has decided to cut back
on certain expenditures. They have agreed to
borrow various amounts. They have agreed
to divest certain assets and have decided to
tap into the Heritage and Stabilisation Fund---
among other certain policy initiatives. As an
individual citizen those decisions are outside
of your realm of control and this is a reality
that we must appreciate.
Whether you agree or disagree with the pol-
icy positions you have to find a way to navigate
the landscape and keep your financial situation
whole. Financial distress is one of the leading
causes of poor workplace productivity and this
distress exists whether the economy is doing
well or doing poorly. That we are in challenging
economic times only makes the distress more
The reason why financial stress exists in
good and in bad times is that we have difficulty
understanding and managing the choices we
make about money. As Charles Dickens once
"Annual income £20, annual expenditure
£19.6, result happiness. Annual income £20,
annual expenditure £20.06, result misery."
Substitute any amount of money that you
work for into the above quote and the message
is the same. So long as you spend more than you
earn you will face financial challenges. It may
surprise you but the inability to make financial
choices transcends income levels. So, a labour-
er earning $10,000, an office worker earning
$15,000 and a manager earning $30,000 will
all have in common the same levels of financial
stress if their expenses exceed their income
and they have not nurtured the ability to make
proper financial choices.
The message at the start of 2017, therefore, is
to focus on yourself and your individual finan-
cial situation. If you don't do that then nothing
external such as government policy or interest
rates or the exchange rate or the rise of Donald
Trump is going to help you.
Conversely if you were to stay on top of your
financial situation then you can adapt to any
changes to the economic landscape and can
have hope of extricating yourself from any
situation. Hope provides the impetus to work
through the financial challenges but to have
hope you must have an understanding of your
financial situation and have some method of
dealing effectively with that situation.
It is often said that hope is not a financial
plan. This is true. It should also be said that
you really will not have the determination to
plan your finances unless there is hope that at
the end you can see a brighter future.
Staying the course
Getting hold of your financial situation is not
easy. Based on the experience of working with
clients I would liken it to dental surgery. You
do it only when the pain becomes unbearable.
Part of the problem, of course, is the way
that financial professionals discuss the issue
A discussion about getting a handle on your
finances often leads to discussions on the me-
chanics of saving and budgeting. To the client
these discussions simply prolong the pain.
Why? Because the focus and emphasis is
on the math and on collecting data. List your
expenses, do a budget, calculate simple and
compound interest, work out your risk toler-
ance, formulate a financial plan.
I am certain based on experience that none
of the tasks written above appeal to you and
so getting a handle on your finances becomes
a chore, one, which is ignored until it,is too
late to do anything constructive without even
Take a step back from all the jargon and do
yourself a favour. Try to figure out what your
money is for. Appreciate that at the end of the
day the purpose of money is to spend it. Either
you spend it now, you spend it in the future or
you give it away to someone who will spend it
at their choosing. If you attach a broad purpose
to the funds that you have then it becomes
easier to get into the math and the mechanics
of a budget.
You can figure out the purpose for your
money by reflecting on scenarios.
What if I lose my job in 2017 or between 2017
What if a child comes along?
What if the job market changes and I need
to get additional skills or training?
These are all valid questions which we
don't often stop to consider in the moment.
We are reminded at the beginning of the year
to set goals and to write them down. This is
good advice. However, the world is changing
daily and a goal written down in January may
be rendered obsolete in February due to cir-
cumstance. Simply writing down your goals is
therefore insufficient. You should have some
scenarios built into your thinking "so that if
this happens then I will adjust by doing that."
This is a far more flexible approach to dealing
with your finances and dealing with it in this
way makes it easier to adapt to circumstance
and so reduces your level of stress.
The worst thing you can do to yourself is to
not have any idea about your financial situa-
tion. The second worse thing is to go through a
detailed plan that is likely to become obsolete
almost as soon as it is done. It takes away your
momentum and frustrates.
In 2017 and beyond, your world will change.
Focus on you, take the time to focus on what is
within your control and give yourself space to
adapt to changing circumstances. If you were
to do that life will become less stressful even
though challenges will remain.
Ian Narine can be contacted via email at ian.
The message at
the start of 2017
therefore is to focus
on yourself and your
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