We tend to fall into the trap of doing the same things year in and year out, and nothing ever changes unless we take action.
You may be feeling that you’re paying too much money in interest, or that you don’t have any spare cash to build up an emergency fund or save for long-term goals. Or even worse – your credit rating may have been negatively affected.
So it’s time to knuckle down, tackle these habits, and ring in the changes:
1. Treating shopping as a form of therapy
We’ve all heard the expression “retail therapy” and it’s actually a thing! Some people go shopping to de-stress or get away from the family and have some time alone.
While it may be a great change of energy to wander around a shopping mall, you are bound to end up buying stuff you didn’t need in the first place. You’re also prone to some serious impulse buying which is never wise.
How to break this habit: Find different ways of de-stressing – perhaps go to a movie with a friend, or go for a massage or a nice long walk.
If you are prone to impulse buying, try this little trick: leave the item and promise yourself that you will come back for it the next day. I promise you, 99% of the time you won’t be back.
The thrill and excitement of the item soon fade as you move on to some other distraction.
2. Always shopping with plastic
It’s a funny thing, but we hardly carry cash anymore. We have a culture of swiping and this is where the problem comes in.
One doesn’t actually see or feel how much one is spending until you look at your statement or get the credit card account. It’s really easy to overspend, particularly if you’re using a credit card.
How to break this habit: If you have to fork out hard cash, you will physically see the money being spent. Also if you shop with cash, you can only spend what you actually have, not a cent more.
This forces you to plan your shopping and be disciplined.
3. Waiting until you earn enough before you start saving for the future.
If you’re waiting for the day that you will be earning the big bucks, so you can afford to put money aside, you may wait forever.
Unfortunately, for most of us, the more we earn, the more we spend, so when do we ever reach the point of having enough money to start saving?
How to break this habit: Start small if you have to, but start, even if it’s only R200 a month. Also, make your savings automatic – set up a debit order on your bank account so that you pay yourself along with your creditors.
Every time you get a salary increase, allocate a percentage of this towards your savings – say, 10%, and soon you will be well on your way to building up a tidy nest egg!
4. Not bothering to budget
Just spending without a budget means you haven’t really a clue where your money is going or if you are overspending in any one area.
It’s easy to rack up debt this way. Budgeting may seem like a painful exercise, but it gives you a pretty good idea of where you’re spending your money and where you are wasting it.
How to break this habit: there are two elements here – planning how you will spend your money and then monitoring to make sure you stick to it. You could go back to basics and try the old “envelope system” which many previous generations used to budget.
Money was put into different envelopes for different purposes – rent, food, electricity, clothes, etc. The money in the envelope was all that was available for that month, so people had to spend very carefully.
And hardly anyone had debt and credit cars were unheard of until the mid-1970s! The Goodbudget app is a modern-day version of this system and is very easy to use.
This article was written by Sylvia Walker, financial planner, speaker and author of smartwoman. www.sylviawalker.co.za
There are many other money habits that make us poorer – share them with us, and also how you managed to overcome them.
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