Times are tougher than Vernon Koekemoer’s biceps for South Africans at the moment, yet many of us are slipping further into debt because we have compulsive spending habits that we find hard to break.
Virgin Money has listed seven simple steps to help keep unsmiling debt collectors from popping round at 5am:
1. Be aware of just how much money you spend
If you take the time to work out how much you spend on various items, this alone might shock you into reducing your spending — just like standing naked under neon lights in front of the mirror might prompt you to hit the gym.
For example, on a night out it is easy to spend much more than you think, especially if you pay for the 1992 Dom Perignon and beluga caviar on cards.
And those small items we don’t think twice about — such as takeaways, coffees and drinks — really add up. It’s really useful to take a glance at your credit-card statement at month-end … while you’re sitting down, of course.
2. Avoid impulsive spending
If you’re under the shopping spell and can’t help buying on impulse, make an effort to have a moment of reflection before buying anything. (No, not an argument with yourself in the mirror.) If you see something you would like to buy, wait a day before you buy it. If you really want it, you will go back, but it does give you a chance to rethink.
3. Don’t spend time where it is easy to spend money
If we spend a lot of time in shrines to the consumer gods like shopping malls, we will be drawn to spend money, so go live in the Karoo for a month.
Not really. This spending is often to relieve our boredom and not because we need to buy something. Therefore, don’t spend every lunch break wandering around your favourite shops with your money screaming at you from your pocket. Get a hobby. Walk your dog. Walk other people’s dogs. Dog other people’s walks.
4. Have clear objectives when shopping
Before going shopping, have a clear objective of what you need to buy — and be more specific than “new clothes to look irresistible”. This means that you will buy things because you need them and not because the little devil on your left shoulder made you do it.
5. Avoid spending by habit
Spending is often a daily habit such as brushing our teeth and complaining about Robert Mugabe, but much of it could be unnecessary. For example, just because you spend R50 a day on lunch doesn’t mean this habit has to continue for ever. Try preparing your own lunch. Review all your habitual spending patterns and decide whether they are necessary. And then carry on complaining about Mugabe — that’s allowed.
6. Give items objective ratings
Before channelling Paris Hilton and hitting the shops, give the target purchase an objective rating out of 10 to show how badly you need it. If you are honest in your valuations, you will think carefully about buying things that score less than eight out of 10.
7. Give yourself strict income limits
If you really have trouble controlling your spending, give yourself a strict amount of income per week. If you learn to live on, say, R1 000 per month of discretionary spending, you will value money more and learn more frugal habits. And you’ll be able to retire sooner. Nice.