Getting out of a financial groove

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KZN wealth manager Lisa Linfield partners with women around the world to change their mindset and help them make, invest and protect their money from life’s unexpected turns. She shares some sound advice when it comes to getting out of a financial groove.

Know where it goes – it always amazes me how often people are struck by how much they spend. You can’t plug a leak you don’t know exists, so getting into the habit of tracking your money each month helps identify easy places to save money. If you’re paying off debt, know how much is going to interest each month and how much is going to pay for what you bought. Just knowing the number makes you more mindful of where your money is going.

The ‘Worth It’ test – money can only be used once, so if something is worth it, spend the cash! If it isn’t worth it, trade back to a cheaper version so you can spend money on other things.  If you eat chicken takeout often, trade from a restaurant to your local grocery store’s cooked chicken. A quarter chicken and chips is R20 cheaper at my local supermarket than at a takeout… If you buy fizzy drinks, trade to concentrate juice and compare the saving per litre. A saving to spend on stuff that’s worth it! Take a few seconds to question your spending and ask, “is it worth it?”

Renegotiate it – it always surprises me how often if you just phone and ask, you can get the exact same thing for less. Last month I found out I could pay almost half on my car tracking each month and get a better service. Don’t assume that your loyalty means you’re getting the best rate – make the call!

Automate it – humans tend to not to change. It’s your brain’s way of saving energy on making decisions and keeping you in the comfort of your current state. So, if you want to save or invest money, set up an automatic payment each month or get your investment company to take a direct debit. It takes effort and paperwork to start it (which is why we don’t do it), but once it’s done, it takes effort and paperwork to cancel it. Because of that, and the fact that we don’t have to use any effort each month to save, we tend to keep it going – and wake up later in life with a lot more money than we would have!

Half it – most people know in their gut they aren’t saving enough but have no idea how to cut anything more from their budget. The best way to save more for your future is for every pay rise you get from now on, save half. Work out how much extra you will get each month and set up an automatic payment each pay day to your investment account. That way you still get a little extra, but over time you will find yourself investing decent amounts for your future.

Learn it – most people were never taught about money – let alone taught about it in a way we can understand. A study showed the average person spent less than three hours per year on their money. There is nothing in the world you can get good at in three hours per year. You won’t have a great relationship in three hours a year, you won’t do well at work in just three hours a year, and your money won’t multiply in three hours per year. You work so hard for your money, why not spend some time working out how to help it make free money while you sleep? There are a ton of great podcasts and books available now. Keep trying out different ones until you find one that makes sense. My podcast is Working Women’s Wealth.

Vision it – it’s hard to give up things you like now for something in the future. I struggle to resist a chocolate now in the aim of creating long term health. Long term wealth is the same – saying no to something now for freedom in the future. If you want to do it, you need a strong reason WHY. I’ve found you need many reasons why – and in fact, sometimes your why not’s are more effective. “I never want to ask anyone for money” is a stronger motivator for me than “I’d like to be able to retire nicely”. Know what will happen if you do save (the why), but have as strong a vision for what life’s like when you don’t have enough (your why not).

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