Now that our digestive systems are getting back to normal after the silly season and in ten days time the ‘Dry January’ challenge will be over – no, Sauvignon blanc doesn’t count – why not detox your finances in Feb? Your wallet is probably still reeling from all those expenses, and there is nothing like a behavioural ‘reset’ than putting your finances on diet – just for a month.
So, how does this work? Pay all your fixed expenses on the first of the month. Work out what you need for food, fuel and essentials and withdraw that as cash. Take all your credit and store cards out of your wallet and hide them, give them to a friend, freeze them in a block of water. Make it difficult to get them back (the friend option is the best for this – you will then have to admit to them you’re breaking your money-diet). This is all about returning to simplicity and getting a clear understanding of materialism in your own life. Like losing weight, going on a ‘money diet’ is difficult. You can’t go cold turkey. You have to spend to live, but you have to count your money calories.
The cash should just be for essentials. No spa days, weekly nail and hair touch-ups, groupon splurges, having a flutter at the casino, new clothes, shoes, toys, gadgets, golf ‘stuff’, books. Make your own food, no takeouts, expensive dinners out and all the other things we do to ‘spoil’ ourselves. Just having cash to pay for ‘stuff’ will feel very different. It is much easier to hand over your store card or credit card for that R1000 pair of shoes than hand over a quarter of your monthly cash. When you spend one month looking at every cent you spend, you will have a whole new appreciation of the waste by the end of it – you will know exactly how much you ‘need’ on a monthly basis, and, more importantly, how much you could be putting into savings.
There is a growing understanding that we have been ‘Punished by Rewards’. You know what I mean – ‘everyone is a winner’, ‘pass one pass all’, ‘I deserve it’. The fleeting good emotion from rewarding oneself endlessly can become addictive, and because the repercussions are so far in the future, many people don’t realise it’s a problem until it is too late to fix. Don’t for one minute think that this is only a problem for the middle class. Irrespective of how much you earn, if you’re spending more than you earn and not investing at least 20% of your income, then you could probably do with a financial behaviour reset.
Author Dawn Ridler