The bend after the spend

Many of us have the tendency to spend money frivolously over the holiday period, not to mention running up insane credit card debt on things we just can’t afford, as well as buying Christmas gifts that weren’t budgeted for. It is easy to get into debt, so money needs to be managed properly, I know too well as I got caught in this trap myself. A simple trip to the grocery store can set you back for the rest of the month. Spending money unnecessarily is a bad habit that can be detrimental to our long term financial goals.

We are living in tough financial times and sometimes it seems that getting into debt is the only way to cope. Remember that one day you will need to get out of this debt, so you will need to stop creating more debt before it’s too late.. Even if you need to make sacrifices and stop living the over-elaborate lifestyle. It’s time to stop living beyond your means.

Quote: “Money is something you have to make in case you don’t die. “–Max Asnas.

Simple tips to assist you in becoming debt free (note to self) 

Budgeting

• Make a budget with a list of what you need for the month and try sticking to it.
• A budget gives you a means to an end, if it’s not budgeted for, you can’t have it - that simple.

Keep it Real

• Stop making debt-tell yourself that if you don’t have the cash, it means you can’t afford it.
• Differentiate your needs from your wants. 
• Make sure that your bills are paid first before doing any shopping.
• See what luxuries you can cut back on so that you can pay extra toward your debt to try and recover quicker (this can also lower what you pay in interest).

Write it down

• Seeing is believing; list all your debt onto a spreadsheet and add them up.
• Have a look at your income and your expenses and see how much you pay on debt repayments, this could come as a shock to you, it shocked me, it was a real eye opener.
• Sort your debts from the smallest to the biggest - Prioritise your bills. If you cannot pay many of them, that's no excuse not to pay any of them. You need to determine which to pay first, how much to pay, and what to do about the others.
• Tackle one debt at a time; start paying your short term debts first such as clothing accounts and credit cards.

Avoid spend by staying home

• If you stay home and avoid shopping malls and eating out, you’d be amazed at how much less you spend in a month.
• Make being at home fun… braai, hire movies, read a good book, laugh with friends-it’s virtually free!

Avoid temptation

• Ban yourself from your favourite store or online shopping site.
• Pay accounts online to avoid having to go in store, only to find yourself buying more.
• If you need to go into a retail store to pay your account, get a friend or relative to do it for you.

     Save

• Put money aside every month even if it is as little as R50 a month.
• Open up a savings account for those unforeseen circumstances, such as your car needing a service, or paying the plumber for your blocked drain etc.
• However remember that there is no point in saving cash if you have debt, so pay that up first before you even think of starting to save. 

Remember a saver grows rich by seeming poor. A spender grows poor by seeming rich.
My hubby gave me this advise, if only I had listened!

For professional financial advise please follow this link:

http://www.oprah.com/contributor/suze-orman

Special thanks to Terri Smith my awesome editor.