Managing your spending is not easy. We all need to relax and have some fun, which seldom comes for free. On top of that, we have bad money habits – from spending too much in coffee shops to gambling addictions, or somewhere in between.

To break those habits takes some thought and action. You can change your ways and be better off for it.

Too much debt

When you add up all those amounts you pay off to settle debt each month, just imagine what you could do with that money if it weren’t for your creditors. Start working towards your new, debt-free life by settling the debt with the highest interest rate first. Say the instalment is R1 000. Once paid off, don’t spend that R1 000 on fun and games. Instead, add it to the instalment of your debt with the second highest interest rate. By always adding the cash that becomes available to the next account you want to settle, you’ll be debt free in no time.

Budgeting? Please!

Yes, boring and time consuming. But look at budgeting as a money plan to reach your goals. If you don’t keep track, how do you know if your expenses are higher than your income? How will you know whether you can afford your dreams? Budgeting encourages you to think ahead and forces you to discipline yourself.

Avoid unnecessary expenses

We’re talking luxuries dressed up as necessities. That expensive cellphone contract that has more data than you ever use in a month? That full home entertainment package when you hardly get time to watch television? Think about it and change those contracts. And buy something only when it is really needed and good value for money.

Too busy to plan

Planning is good and can be as simple as knowing what food you’ll prepare in the week ahead and stocking up on the ingredients over the weekend. That means no pizza plus cold drinks for four because there is “nothing in the house”. You just saved about R400 there. Plan to prepare lunch boxes for the kids and your own lunch for work. Buying sandwiches from a café at R20 a shot will cost you another R400 per month.

Read bank statements

Yes, you have to – they’re an accurate reflection of your financial life. Ignoring them means you have no idea of your real spending habits. Have you ever worked out what you paid on banking costs over the last 12 months? And all those tiny amounts you withdraw from the ATM without thinking? It’s like water leaking slowly from a bucket – before you know it it’s empty.

Not enough to save

Imagine that you lose your job, but get lucky and find another employer who pays you 10% less. You would make do, right? So start saving 10% of your gross income now. With a nest egg in place, you’ll be prepared for any situation. Fridge packed up? Burst tyre? No problem, that’s why you have your savings account.

In short, being 100% honest about your bad money habits is the first step towards a rewarding money future where you call the shots instead of your bank manager and creditors.

By Helen Ueckermann

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