Manage your money like a grown-up By author and money coach Sam Beckbessinger

Money might make the world go round, but it can also make our heads spin. Luckily, author and money coach Sam Beckbessinger is here to answer your questions.

Q“I’m struggling to curb my shopping habit. How do I resist the temptation to buy without having to go cold-turkey?” – Nerine, 29

Open a second account. Call this your Fun Fund. I like to put stickers on my Fun Card to make it look silly. Your old bank account (that your salary gets paid into) is now your Grownup Account, for important bills only. Take that card out of your wallet and keep it hidden.

Now that you’ve opened a separate account, you can create a monthly budget and allocate specific amounts for frivolous spending. How to do this? At the start of the week, transfer a quarter of your fun budget into your Fun Fund. Spend that money, guilt free!

When your Fun Fund is finished, it’s finished. No arguments! But if you’re still struggling, use these simple behavioural tricks to help you curb your spending:

Delete the triggers

Avoid malls like you avoid your ex, unsubscribe from marketing emails and install an ad-blocker.

Displace the behaviour

When you get the urge to go shopping, do something else instead that gives you a similar emotional reward – call your mom, go for a walk, watch a Ryan Gosling-movie marathon.

Figure out what reward you’re really after

Are you shopping because you’re bored? Is it a way to connect with a friend? Are you insecure about how you look? If you can understand what’s actually driving the habit, you can find a better way to meet the emotional need behind it.

Q“Is it too early to be thinking about a retirement plan? When is the best time to start and where do I even begin?” – Danica, 19

No, it’s not too early to begin thinking about a retirement plan. Even if you’re 12 and slightly obsessed with Zayn Malik. You know Warren Buffett, the third richest dude in the world? Do you know how he got so rich? He was just 11 when he bought his first shares. Compound interest is one of the most magical and powerful forces in the universe, and what gives compound interest its power, is time.

Imagine that 200 years ago a vampire had put R200 into an investment account that grows just 8% a year. They’d have R1 billion right now. That’s why vampires can live in mansions and wear fancy velvet waistcoats all the time.

Now, you might not be an immortal blood-sucking being, but if you start saving for your retirement in your 20s, that means you’ve got over four decades for your money to compound. Starting just a few years earlier can literally translate into millions of rands extra after you retire, meaning you can be one of those 80-somethings taking crazy round-the-world trips twice a year instead of surviving on tin food.

Even if you can afford a few hundreds a month, saving for your retirement from your very first pay cheque is one of the best gifts you can give to your future self. It doesn’t have to be complicated either: you can open a great retirement savings account online at 10X Investments (10x.co.za) or Sygnia Asset Management (sygnia.co.za) in under 10 minutes.

If you’re young, you want a low-cost, high-equity investment at a reputable institution that’s especially tailored for retirement savings (so you get the tax benefits) – and there’s plenty to choose from. I’ve compiled a list of suggested funds on my site to add to your portfolio (likeafuckinggrownup.com/ investing/good-funds).

Choosing a retirement account is easier than finding the perfect pair of jeans. Plus, the retirement account will add more to your happiness over the long run. And if your employer offers retirement matching, max that out first, because it’s basically free money.

Q “I still owe a large amount in student loans. How can I get ahead while still paying off my debt?” – Carly, 30

Debt is the worst! You have all my sympathies; I spent most of my 20s trying to claw my way out of a debt mountain of my own making. So I know how miserable it feels to be stuck paying for the past instead of building wealth for the future. On the bright side, your student loans aren’t from credit cards or loans. You’re smarter than me!

Work out exactly how much interest you’re paying on your loans. You might have to actually phone the creditor to get this information. The best strategy depends on what this interest rate is, because if the debt is expensive, it often saves you money to try to pay it off as quickly as you can.

NSFAS loans tend to be 80% of the repo rate (the rate banks borrow money at from the Reserve Bank), which winds up at around 5.4%. That’s awesome, since you can quite easily beat that with a long-term investment in equities. Keep paying the minimum and simultaneously start building up your wealth by investing.

Bank loans, on the other hand, are a different story. They’re usually charged at around prime or prime+2, which is around 10.25%-12.25% (prime is basically the lowest interest rate banks charge the public). That’s a lot harder to guarantee in investment returns (not impossible, but harder). If you have this kind of debt, you want to balance saving and investing with accelerating your debt repayments. Do whatever you can to find extra money every month for your financial future. This could mean cutting expenses you don’t really need or using those hard-won skills you have to start a side-hustle.

As a rule of thumb, you want to be reserving between 20-30% of your income for investing, saving and accelerating debt repayments. I know, I know, it sounds like a lot! But it’s OK if it takes you a year or two to get there, just aim to increase the amount you’re saving by a R100 every month, and it will happen.

Q“Living in the city allows me to have quite an active (and expensive) social life. Is there a way for me to spend less money on entertainment without cutting down too much?” – Nandi, 27

Wait, is this me from the past? Where did you find a time machine for letters, me from the past?

It’s rough trying to stick to a budget in your 20s. The sensible part of your brain knows that you should be saving as much as you can so that future you can be rich like those wealthy vampires, but you’re not earning that much yet, and there is just far too much fun to be had right now.

Try creating a separate Fun Fund like I suggested before.

Remember: this isn’t an all-or-nothing game. If you go out drinking with your friends and switch every second drink for a glass of water or split a meal with your friend, you can slash your entertainment spending in half. You could also try to encourage your friends to do more free stuff with you, like movie nights or Badminton. I hear Badminton is pretty cool.

But you know what? You only live once, and these are the times you’re going to remember.

As long as you’re not going totally nuts, don’t worry so much about cutting back on your entertainment spending. Rather spend less money on your car, rent and those other big monthly bills that don’t actually make you happy. And pick up a side-hustle, pronto. Or just find more broke friends.

“Don’t let money be something you only talk about in times of stress.”

“Choosing a retirement account is easier than finding the perfect pair of jeans.”

Q“I’d love to adjust my diet. But healthy foods are so expensive and it’s much cheaper for me to eat out or order delivery. How do I get a healthier lifestyle on a budget?” – Beth, 45

‘Beans, beans, they’re good for your heart! The more you eat them, the more you…’ ahem, sorry, got carried away there.

The trick to a frugal, healthy diet is planning (and beans – seriously). Spend time researching three to four meals that you really like, and are cheap and healthy. You might think you’ll get bored eating the same few dishes all the time, but once you’ve built a basic routine, then you can start mixing it up. By focusing on a few core meals, you can buy in bulk and pre-cook meals at the beginning of the week so that you’re just warming stuff up on lazy midweek nights.

There’s a subreddit (a forum on reddit.com) called ‘Eat Cheap And Healthy’, which is crammed with healthy and affordable meal ideas, which you can take a look at. Some of my favourites include bean curries, homemade hummus, Buddha bowls, soups, lentil dals and spicy Mexican chilli. I make all of these things in a humongous pot on Sunday afternoons and freeze most of it. Once you try #Mealprepsundays you’ll never go back.

Eating a Mediterranean diet has consistently been proven to be healthy and purse-friendly, too, as it’s built on veggies, legumes ( beans!) and healthy oils, with some fish and very little meat.

But the best diet is one that you really like eating, so do some research and find the one that’s right for you. Q“Do I need a credit card to have a good credit score?” – Adira, 32 Here’s a crazy fact: half of all credit-active South Africans are at least three months behind on their debt repayments. Yes, half. Solution: never take out more debt than you can pay back easily, regardless of how important you think a credit score is.

Based on the statistics about debt in SA, having a credit card just to build up a good credit score is simply too dangerous for most people. Many things, other than credit cards, can help you build up a credit score, including car loans, insurance policies, and phone and TV accounts.

There are a few things that contribute to having a good credit score. One of them being credit utilisation, which means that you have a large credit limit on your credit card or overdraft but you only ever use a very small amount of it. Using little of your available debt improves your score, and it’s one reason people are encouraged to keep credit cards with big balances. But credit utilisation doesn’t count nearly as much as being good about paying your bills on time, which doesn’t also carry the temptations of large credit limits.

But sure, if you’re absolutely confident you can be as disciplined as a saint, go ahead and get the biggest credit card limit you can, and then pay off the balance in full every single month.

Pro tip You can get one free credit report a year (transunion.co.za is a simple place to do this). You should do this every year to check your credit score and to make sure that there’s been no credit fraud under your name.

Q“What happens if an emergency pops up and I haven’t saved for an emergency fund yet? What are my best options and what should I avoid?” – Mosele, 46

Here’s a list of options from best to worst. Option 1 Check the fine print in your insurance policies and make sure you’re not actually covered for the expense.

Option 2 Sell some of your valuables. I bet there’s some things lying around in your house that you’re not even using.

Option 3 Earn some extra dough. Keep it legal, obviously.

Option 4 Borrow from family or friends. They’re likely to give you the best interest rate. Put down a formal agreement, in writing, about when and how you will pay the money back.

Option 5 Borrow against a secured asset. If you have a home loan, or someone else you know has a home loan, you can usually borrow money with the house as collateral. If your parents have a home loan that they can withdraw from, and you’re confident that you can pay them back, it might be worth asking them to borrow the money and pay them back with the interest they pay on their mortgage. But make sure you pay this debt back as fast as you can.

Option 6 Borrow from the bank. Ask for a few options, and find the lowestfee way to get cash. If you already have a credit card, you might have to use it – taking into account that if you can pay the money back within a certain number of days, the credit card doesn’t charge you any interest at all.

Option 7 As a last resort, look to a payday loan company. Shop around and find the cheapest one, but also go for one of the larger, more reputable businesses that are less likely to send someone to cut your legs off if you don’t pay them back in time. Plus, never hand over your ID to a debt company or informal lender.

Q“I’m recently married, and this is the first time I’ve had to share everything. Is it better for us to set up separate or joint bank accounts?” – Zooey, 33

Congratulations! And well done for thinking about this. It might sound unromantic, but learning how to talk about money in your relationship is one of the most important things you can do to keep your love alive, because money problems are one of the most common reasons for divorce.

There aren’t any simple rules here

Relationships come in an endless number of configurations. You might have married your high school sweetheart or be living in a poly hippie commune – point is, some couples like to share everything, others keep a shared household account but still have private accounts for discretionary spending, and some couples find they thrive by keeping their financial lives separate and just divvying up the shared bills. It’s up to you and your partner to find the strategy that works for you.

This isn’t just about admin either

Money touches all of our fears, our insecurities, our hopes and our values. So here’s an exercise to help you get onto the same page: on my site ( likeafuckinggrownup.com/etc/ money-questions), you’ll find a list of money questions for you and your partner. Put aside an evening, make your favourite dinner and spend some time independently writing down your answers to these questions. When you’re done, swop answers and read what your partner wrote. These questions will ask you to think about your financial goals, beliefs and worries, and learn about theirs.

Some specifics to keep in mind

If you’re married in community of property, you should consider at least having view-only access to your partner’s account, because their debts are your debts, and no one likes nasty surprises.

Regardless of whether you decide to share accounts or not, it’s really helpful to have a monthly ‘money date night’ with your partner where you discuss your goals and the household budget. Don’t let money be something that you only talk about in times of stress.

Consider seeing a financial planner to help you define your shared long-term goals (preferably one you pay an explicit fee to). The team at Lifecheq ( lifecheq.co.za) are pretty great.

Q“How do I go about choosing a good investment/savings account?” – Willa, 34

I could write a whole book about this topic. Actually, I did! You should buy it! It will tell you exactly how to choose the savings or investment account that’s right for you, and many other useful tips about whipping your finances into shape. Sam Beckbessinger is a writer and entrepreneur who is on a quest to help SA’S young adults understand how to take charge of their finances. For more financial tips, Manage Your Money Like A F*cking Grownup (Jonathan Ball; R190) is available at your nearest bookstore.