THE domino effect of the tin-pot dictators north of our continent and the toyi-toyi in the rest of the Middle East has kept the capital markets all over the world jittery. It clearly demonstrates the interdependence of the whole world which has increased with the global village effect.

We can no longer pretend events in other parts of the world are not our concern. A few months ago, it seemed like an oil price of over $100-a-barrel was just a temporary spike, now the price is looking decidedly comfortable north of $110-a-barrel. That is like another 10% tax has been imposed on all of us wherever you are.

The west, or the east for that matter, has never really cared about the lives of the people living in these areas and pretending to care now is really nauseating. All they really wanted was for oil and other resources to continue to flow to support their insatiable economies by all means necessary.

The worst culprits are Britain and the USA. You hear them hypocritically talking about democratic elections in other parts of the world but when it comes to where they are extracting resources, they do not seem to care. As George Bush and Tony Blair were leaving the political scene, in their collective wisdom they agreed Muammar Gaddafi was sufficiently rehabilitated and all previous terrorism charges were immediately expunge.

What informed this decision had nothing to do with the fact that Gadaffi had suddenly held an openly democratic election. He still had his knee firmly on the neck of the Libya people. He was negotiating oil concessions like the Libyan oil fields were his private property together with his sons. Even up to now, it is not clear whether there is a distinction between the family’s bank accounts and the national bank accounts. We do not need to be rocket scientists to know that this is indeed wrong.

African leaders were complicit in this abdication of responsibility as many of them at individual and political party levels were beneficiaries of his largesse and we still have images of them gushing at African Union meetings about the “dear brotherly leader”. If you look at the other characters sitting on huge oil deposits across the world, it does very little to inspire long term confidence in the oil markets.
 
This is impacting all economies across the globe and eventually the buck stops right at every consumer’s pocket. If your budget did not have much leeway before the dictators came tumbling down, then it is likely to be getting out of hand in 2011.

In these turbulent times, financial literacy which is really the ability to make informed decisions and take appropriate and make informed judgments on matters affecting one’s financial wealth and well-being, becomes a necessity. If you generally just let life happen to you, perhaps this might be a good time to go back to basics of simply budgeting.

Your budget ought to take into account all your income, foreseeable and unforeseeable expenses. The oil barons have already increased your costs without your consent, so if your income has not increased, then your costs have to come down if you were at a balanced budget state. If your expenses were already exceeding your income, then it is time to find extra cash elsewhere.

They say this is a bit like dieting because while you are trying to shed the extra weight, you need to eat fewer calories a day than normal. Once you have achieved the target weight, you can eat a balanced diet with a higher calorie content which will maintain your desired weight.

The early things to cut on include entertainment, satellite television, and up-market shopping. I am sure Manchester United and Chelsea, or even closer home Pirates and Chiefs can survive you skipping a few matches and watching them at home on public TV?

We have recently sliced off more than R500 ($70) from our electricity budget by simply switching off the geyser after we bath in the morning and putting it back on in the evening together with keeping the pool pump off most of the day. 

Any savings you make should go towards reducing expensive debt which costs you the most in the long term. This includes micro loans, credit card debt, personal loans and overdraft facilities. Paying off this debt is probably the best guaranteed return you will ever get from any investment.

The temptation during these difficult times is to skip payments on even on bonds. Clearly, you do not want to do this particularly if you are living in other people’s countries as you need to maintain that roof over your head. This could also impair your credit rating which would affect your ability to borrow in the future.

If you have to borrow in these uncertain times, only borrow to fuel growth. Borrowing costs money, and when you do your budget, it is necessary you can afford the repayments. Here in our adopted country, energy, water and transport costs are increasing above inflation. Borrowing to fund designer clothes, flat screen TV or an exotic holiday at one of those locations while the children’s fees and retirement requirements are not catered for is clearly a no-no.

Surviving the difficult seasons we are passing through does not have to be all doom and gloom. A few years ago, we had an e-mail which we circulated amongst our friends about happiness being a voyage. Most of us are always trying to postpone our happiness. Some among us tried to convince ourselves that we would be happy once we finished school, got a job, married and had a home. It is like chasing a mirage.

Others have tried to convince themselves that they will really be happy when they get back to Zimbabwe and have made enough money in the Diaspora. Happiness should not equate to reckless spending. Be happy wherever you are in the small finer things of life. Redeem the time for the coming days and seasons are difficult.

Tafirenyika L. Makunike is the managing partner of Napachem cc (www.nepachem.co.za), an enterprise development and consulting company