Chin Up, keep perspective and don’t let money ruin your life. By Liezel Joubert.

So you didn’t get as much out of renting your second bedroom or selling soccer memorabilia as you thought you would? Well, with World Cup euphoria almost behind us and not much hope of cashing in on it now, it’s as good a time as any to get some perspective on money matters.

‘A bad financial situation – or a good one for that matter – doesn’t only affect our lives in monetary terms. Money concerns can also become emotional issues. A bad financial space can leave one feeling despondent and anxious and this often affects every aspect of home life,’ says Moeshfika Botha, media and communications manager of debt counselling firm Credit Matters.

Recent research* by psychologists at the University of Minnesota’s Carleton School of Management, underlines this with findings of a distinct relationship between money and a person’s threshold for physical and social pain.

Thus, says, Moeshfika, if we become more responsible about money and set out clearly defined dos and don’ts, it can lead to a more positive mindset and approach to life. ‘But as with anything we hope to succeed in, we have to be properly and adequately informed to make the right decisions.’

According to Moeshfika, people need to start speaking out about their financial situation. ‘We attach so much guilt and shame to it that the topic is practically taboo! It’s definitely not something you discuss over the dinner table in the same breath as movies and new recipes.’

But she also says that the only way to stop bad financial habits is to start having intelligent, meaningful discussions about money manage-ment. ‘There are so many issues people would like to know more about, and could know more about – if only they could get themselves to talk and listen.’

She lists a few dos and dont’s to help you on your way to financial (and emotional) recovery:

DO…

• Draw up a budget and be brutally honest with yourself while doing so. List your income and expenses and differentiate between necessities and luxuries. Make a note of monthly expenses such as taxes, UIF, bond repayments, vehicle instalments, store accounts, credit cards, school fees, transport fees, food and medical aid. And if, after everything’s been accounted for, there’s no money left for anything else, accept it and adopt a positive attitude.
• Be proactive. If you are heading into financial difficulty, make use of the protection granted to you by the National Credit Act and see a registered debt counsellor.
• Keep things in perspective. Make connections – family, friends and other support structures are very important in times of trouble
• Maintain a hopeful outlook – expect good things to come your way rather than dreading negative outcomes that may never materialise.
• Whatever you do, never let the stress of a bad financial situation disrupt or depreciate the value of life. Put strategies in place to avoid this happening.

DON’T…

• Spend money you haven’t yet received. This applies to increases, bonuses and mainte-nance money. If the money doesn’t materia-lise, you could land up with a loan to repay.
• See crises as insurmountable problems – you can change how you interpret and respond to stressful events by having confidence in your ability to come up with solutions.
• Beat yourself up about it. It solves nothing and saps energy needed for dealing with the situation. Rather equip yourself with useful information that will make you think twice about repeating the same financial mistakes.

WHAT IS YOUR MONEY PERSONALITY?
If you are predisposed to spending impulsively, you may need to work harder than others to stay debt- and stress-free. But, as with any habit, it can be changed. Paul Barnard of North Star Solutions, a company that offers workshops in personal money management, profiles certain money personalities and pinpoints the danger areas:

THE STINGY TYPE
You typically sacrifice the good things in life to save money. You spend on needs and never on wants – even if you can afford to! You are unlikely to be tempted by a personal loan or credit card offer and probably have quite a bit stashed away in a savings account. The downside of being stingy is that you never really get to enjoy your hard-earned cash and life’s too short for that.

THE CAREFREE TYPE
You spend more money on wants than on needs and no matter how much money is earned, it will never be enough. You often use one form of credit to pay off another and may well have to take out a personal loan to meet expenses. You seldom keep records because then you’d see how much debt you actually have.

THE CONSERVATIVE TYPE
You are very careful with money. You may have store and credit cards, but live within your means and always pay your accounts on time. Unfortunately, you lack the confidence to make that big financial decision. You delay your long-term investment plan or a property purchase and miss out on real returns on the money you are saving.

THE RECKLESS TYPE
You are quite happy to throw money around. Unlike the carefree type who doesn’t have money to spend, you usually have plenty at your disposal but are irresponsible with it and have no back-up plan. Like the carefree type, you are hopeless with record keeping and may also make some bad investment decisions which could leave a serious dent in your wealth. You are accustomed to being wealthy but ignore the basics of money management and may find yourself in
trouble if you overextend yourself.

THE VERDICT
‘From the above you can see that the carefree type (closely followed by the reckless type) is most likely to be over-indebted. It’s highly unlikely that the stingy or conservative type will get into debt,’ Paul points out. He suggests a few simple rules for the carefree and reckless types to consider:

• Avoid buying things you don’t need.
• Live within your means. This means not spending more than 35% of your income, after tax, on debt repayments and rent.
• Keep records of your debt obligations and be aware of credit’s interest rates and fees.
• Meet your minimum debt repayments each month.
• Build up a savings account to pay for emergencies rather than be forced to use expensive credit.
• Keep a clean credit record so that when you do use credit you can negotiate the lowest interest rates and fees.

CONTACT
Credit Matters
086 111 6197
www.creditmatters.co.za
info@creditmatters.co.za

North Star Solutions
021 686 3540
www.northstarsolutions.co.za
info@northstarsolutions.co.za