Try a Pushpa Pock­et­book

Central Leader - - OPINION -

Dr Pushpa Wood is one of my favourite money people.

She’s a money per­son by dint of her head­ing up Massey Univer­sity’s Fi­nan­cial Ed­u­ca­tion and Re­search Cen­tre.

The cen­tre is ded­i­cated to study­ing people and the way they han­dle money, as well as help­ing train a legion of fi­nan­cially lit­er­ate teach­ers and train­ers who can pro­gres­sively lift the coun­try’s fi­nan­cial smarts.

As you may ex­pect, Wood has seen a thing or two and she’s delved into the strate­gies and tac­tics people can use to get on top of their spend­ing.

Her num­ber one tip is to get yourself a slim note­book, the cheap red kind that slip eas­ily into a hand­bag or pocket, on which you can write ‘‘Spend­ing diary’’ and en­ter in ev­ery sin­gle pay­ment you make.

We’ll call it the ‘‘Pushpa Pock­et­book’’.

You see, the big­gest im­ped­i­ment to many people end­ing the month wealth­ier than they be­gan it, or in­deed less wealthy than they could have been, is frit­ter­ing.

Wood has seen enough in her many years to re­alise that people with money trou­bles of­ten have lit­tle clue on where their money goes.

The banks all have neat on­line ‘‘track my spend­ing’’ ser­vices on their in­ter­net bank­ing plat­forms like Ki­wibank’s Heaps.

But the odds are they aren’t be­ing used by the many people who strug­gle with turn­ing that profit, or turn­ing one large enough to make head­way on their long-term goals like beef­ing up their emer­gency fund, sav­ing for a house, ac­cel­er­at­ing their path to be­ing free of the mort­gage, pay­ing off the stu­dent loan, or build­ing their re­tire­ment sav­ings at an ac­cept­able rate.

You see the truth is, if you want to end the year with $500 more in the bank, or paid off the prin­ci­pal in the mort­gage, the sim­plest thing is to spend $10 a week less. You could, of course, earn $500 more and keep your spend­ing the same, or in­deed do both and end up $1000 richer, but you get my point. The Pushpa Pock­et­book be­comes a tan­gi­ble force, not just to help you record and hence see what you are spend­ing, but also be­comes a fo­cus for the re­ally im­por­tant dis­ci­pline Wood seeks to teach. Above all, her stu­dents learn to think in terms of needs and wants. Spend­ing on a need is good. Spend­ing on a want is, if not bad, some­thing that needs to be done with hes­i­ta­tion.

Those not mak­ing it to the end of the month richer and more se­cure need to have an espe­cial fo­cus on cut­ting down the ‘‘want’’ spend­ing in or­der to be able to bank a sur­plus.

Wood says stu­dents tell her that they feel they carry a tiny, in­vis­i­ble ver­sion of her around on their shoul­der, ready to squawk ‘‘Need or Want!’’ ev­ery time they head to­ward the till/pie shop/ on­line check­out – a bit like a fi­nan­cially lit­er­ate ver­sion of Long John Sil­ver’s par­rot.

Per­haps you need to have been one of her stu­dents to de­velop the in­vis­i­ble Pushpa Par­rot but any­one can get them­selves the pock­et­book ver­sion. And in case you feel that it’s a bit low-tech and be­neath your dig­nity, Wood still uses one and there aren’t many who can claim to be as fi­nan­cially lit­er­ate as her.

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