Spring is officially here and lets ’s face it, most of us could benefit from doing a little spring cleaning. But it’s not just our kitchen cupboards and closets that need spring cleaning – many of us could do with sweeping out some poor financial habits and counter-productive relationships too.
Spring is the ideal time to review your financial situation if you haven’t done so in a while, says John Manyike, Head of Financial Education at Old Mutual.
“The silly season and all that comes with it is just around the corner, and we all know how expensive that time of the year can be! That’s why it’s important to look closely at all your current expenses and see where you can cut costs and save in preparation for this festive period and as part of your overall financial planning.”
If you live with a spouse or partner, Manyike suggests making a list of the household expenses that each of you is responsible for, before re-evaluating these lists against your salaries.
“The financial situation of one or both people in the relationship may have changed, there could have been a promotion, or someone may now earn less than before. Whether you agree that household expenses should be split fairly and in proportion to your income, or one person is comfortable taking on more of the financial responsibility, the important part is that you be on the same page.”
It is also wise to take stock of your relationships with friends and relatives and be aware of which relationships may be negatively influencing your spending habits, says Manyike.
“We all have certain friends that, when we get together, we just know we’re going to end up regretting how much we’ve spent or footed the bill in its entirety. As fun as these friends may be, it’s important, to be honest with them about your goals and put firm boundaries in place. Many people experience peer pressure and find themselves having to conform to certain social standards even when they cannot afford that lifestyle.
“Unbudgeted spending tends to eat into your savings and investments pool. Learn to say no to friends who always want you to join them on expensive nights out for dinner or drinks at trendy bars. It’s easy to get tricked into impulse spending such as unplanned shopping sprees which often start out as an innocent coffee date with an impulsive or bored friend,” adds Manyike.
It’s also easy to fall into a trap of living beyond your means, spending money quicker than you earn it, he says. “This is often because we live in a world driven by FOMO (fear of missing out), consumerism and society have conditioned us to try and impress our friends, family and neighbours. Social pressures are ever-present, so it is important to stay focused and find ways to improve your financial stability.”
Manyike urges all South Africans to evaluate their finances and set financial goals. “We must do whatever is necessary to help us reach our goals, and sometimes that requires tough decisions or conversations or even forgoing certain relationships. The more control you have over your finances the better off you will be – you’ll be able to save and invest more, and will reach your life goals sooner,” he concludes.
- PERSONAL FINANCE