Cut down your spending habit
EVEN if you seem to be managing well right now, it is always a good habit to cut down on costs.
Many people confess to having the desire to save money but are unable to do it. They save a bit and then go back and take the money because there are “pressing needs”.
Good money management is a mental exercise in self-regulation and focusing on the long-term goal, even when you’re sure you just can’t go on another day without buying that iPhone, or other latest gimmick. Saving is not easy and even organised, priority-minded people can stumble. Some people cannot figure out how to save more, how to stop spending too much, and how to keep doing both over and over again.
It is a known fact that every person’s financial needs are different, and anyone can set up simple systems to help themselves from buying things they don’t need and almost automatically save money they will need later.
This may sound too theoretical but take a look at these few techniques which can help you cut costs and do the right thing by your money without much effort.
Have a waiting period rule for flashy stuff you want to buy. Nearly all of us know what it feels like to regret buying something – especially when it comes to big purchases. I hear people say: “Eish ,I didn’t want to buy this car but ended up ‘upgrading’ to a better model.” This is a mistake. Have a 30-day waiting period rule where you write down each thing you want to buy and you don’t look at the book again until 30 days later.
You can also have a rule that says for every R1 000 that you want to spend, have a two-day waiting period. Of course, these rules pertain to niceties only – your pay TV package, phone upgrades, and other luxuries – those things you can’t seem to figure out whether they are needs or wants.
After this waiting period, you will see how unnecessary most “musthave” things truly are. Keep the change Get into the habit of rounding off your payments. How this works is basically, if the product costs R128, you round up the amount to R150 and save the difference. You can save your spare change in jars at home. This is your passive saving technique although our electronic transactions are making the availability of coins fewer and fewer.
Freeze your credit card for serious spending stoppage
This trick is highly recommended for those with a serious shopping addiction who still need a credit card around for vital purchases.
Have goals that motivate you to save
When I coach kids on money issues, I always tell them that “if you don’t have your own goals, you will continue to fulfil the goals of those who have them”. This simply means that when you have no direction or idea of what your life must be about, other people will help you to define your life and make you buy anything and everything they tell you to buy. You end up being a debt slave.
So to avoid all this, have something that you really want – house, car, good education, etc, that will keep you motivated to put money away. In fact, arrange a debit order on your account so you can forget about trying to save.
Truth be told, even if you seem to be managing well right now, it is always a good habit to cut down on costs. We are moving into a tough financial climate and this problem is worldwide. Prepare for even tougher times ahead. You will need more money for the same things you used to buy.