September 19, 2010
Filed under: Manage Your Money — Gloria and Alpha @ 1:00 am
What actually is a habit? There are a number of different definitions for what a habit is, but one that’s appropriate is “a mental constitution or attitude”. Behave in any given way for long enough and it can become a habit.
Being in debt can also be a habit. Thankfully, habits can be broken by being replaced with a different, more constructive habit.
There are many schools of thought on how long it takes to break or make a habit. I’ve found the consensus to be 30 days. So, the task is to work on replacing your habit of being in debt, with another habit. As with most things, the first step is mindset. We’ve already dealt with that in previous posts, so I won’t go into it again here.
What action leads to the result of debt? There are likely to be quite a few, but let’s start with spending. If the habit of spending is what’s leading you to being in debt, why not replace it with the habit of not spending?
Start by taking a look at your credit card statement for the last few months. What items on there aren’t absolutely necessary – be it the item itself, or the exclusivity of the item?
For 30 days, focus on not spending on items that aren’t absolutely necessary (i.e. food, rent/mortgage payments, petrol, public transport, etc.). Once you get out of the habit of constantly spending, you will find it easier to moderate your non-essential spending.
I’m certainly not saying to never spend another dollar on items that aren’t absolutely necessary. It’s important to you get your spending under control and take charge of the situation.
At the end of your 30 days, look back on how easy or difficult the process was. It might even be worth keeping a “money diary” through the process, so you can more effectively track your progress. What have you got to lose?
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August 29, 2010
Filed under: Manage Your Money — Gloria and Alpha @ 1:00 am
This is a concept that may seem pretty simplistic, but it’s one of the main ways you can really start to reduce your debt.
The first step is calculating how much debt you actually have, and the sources of it. It’s not a pleasant process, but extremely necessary. Make a list of what debt you have and with whom the debt is sitting with.
If it’s predominantly on credit cards, you can often open a new credit card and the transferred balances incur a lower rate of interest for an introductory period.
Keep your eye out for these types of deals, as they will accelerate your debt reduction process.
A very important aspect to this however is to then CANCEL all those credit cards you previously had balances with. Remove the temptation. You will feel lighter, and it will also improve your future credit prospects.
Likewise, if you have a home loan, and there is some equity in your property, you may be able to increase your home loan to pay off all your credit cards. The interest rate on a home loan is generally substantially lower than credit card interest rates, and it also simplifies the repayment process, as you only have one bill to pay off at the end of the month.
Again, the important caveat to this is cancelling the cards that have been paid out. Just keep one (or possibly two) credit cards, and ensure they have a low credit limit.
This is also not a strategy to repeat every other month. Be disciplined. Do it once and learn from your spending mistakes.
Getting into debt can happen without you really notice it, so take steps to reduce the debt and move on. There’s no need to dwell on the process and spiral into a depressive state. This may sound easier in theory then practice, but we’ve all been there at some point or another. Learn from the lesson and don’t let a state of debt define you.
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August 22, 2010
Filed under: Manage Your Money — Gloria and Alpha @ 5:11 am
If you’re faced with a level of debt that you’re not comfortable with, think about how it came to be in terms of timing. It happened little by little, or purchase by purchase.
Unless you receive an unexpected financial windfall, you will need to approach reducing your level of debt in the same way.
To start with you need a plan for reducing your debt. Pick the debt that has the highest rate of interest charged on it, and focus more of your money on paying that off.
Break down your earnings in terms of how much you can use to service each different source of debt that you have, and allocate more to the source you’re focusing on.
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August 16, 2010
Filed under: Manage Your Money — Gloria and Alpha @ 8:54 pm
Years ago, there used to be a saying, “Boys and their cars…”, but today, many women are also very car conscious.
By that I mean, they are very fond of their car and really take care of it. I say, many and not most deliberately, because all the women in my family, although we love our cars, we aren’t fanatical about them. However, it is just as important to watch the expenses you incur in looking after your car as are the expenses when grocery shopping or any other part of your financial outlays.
So here are 9 simple, effective steps to owning a car
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August 11, 2010
Filed under: Manage Your Money — Gloria and Alpha @ 7:35 pm
Grocery shopping is probably the simplest way to spend more money than you anticipated. Not only is looking at all those beautifully displayed foods pleasing to our visual sense, but the lingering smells as you walk around a supermarket or shopping mall….
It’s a well-known fact that, our sense of smell has the quickest and most direct line to our brain, and so, when we smell all those tantalising aromas, our brain says, “I must have that.”
Even the most disciplined buyer can be tempted to ignore the well-thoughtout shopping list. You then end up spending at least a quarter as much again as you had planned to spend.
Here are 6 grocery shopping tips to stay on track
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August 6, 2010
Filed under: Manage Your Money — Gloria and Alpha @ 6:15 pm
Do you feel that you could handle your finances better? Are you finding it hard to get ahead? How often have you vowed to take a grip and spend less, only to find that you slip back into old over-spending ways?
Spending money is a habit. In fact, everything we do is a habit. And, just as we created that habit, we can also get rid of that habit.
Notice I didn’t say, “Change that habit”. I said, “Get rid of that habit”. Habits cannot be changed, they must be replaced by another habit, so that it fades ‘off into the sunset’.
Just imagine back to when you first started work and you received your first pay. You had all these good intentions to save, didn’t you?
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July 21, 2010
Filed under: Manage Your Money — Gloria and Alpha @ 10:27 pm
I’m often astounded that there is no education in our school systems about how to handle money.
- What money is
- What money is not
- The different ways to save money
- The different ways to spend – which ways are fruitful and which are fruitless
- What you can do with money – apart from the obvious
- What money is not for
- How to spend money so that it works for you
- What happens when you spend money foolishly – short-term and long-term repercussions
- Money and investing
- The different types of investing
- Money and borrowing money
- The many options for borrowing money available today
- What credit cards are
- What credit cards are not
- And so on, and so on
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