shop responsibly

shopping addiction

Tue, 19 Jun 2012 16:30:07 GMT

serious matters

A shopping addiction is a very real problem, and shouldn’t be treated lightly. The problem is usually more deep-rooted and emotional that simply an obsession with shoes; those who are compulsive shoppers use shopping to deal with emotions they’d rather not deal with. There’s no shame in admitting that you have a problem, and the first step towards getting better would be to admit that you have a problem, and find a person or institution to support you. At this point you may be wailing that you can’t spend any money, but a good psychologist won’t be money wasted if it means eventual financial freedom. See therapy as an investment, rather than an expense.

money management

Tue, 19 Jun 2012 16:13:06 GMT

Money Management, also known as sound financial planning, shouldn't be something you do only once a month. Start making it a part of your everyday life with some of these tips:

have a "spend-nothing-at-all-not-even-on-parking" day

For most, this will be a creative exercise, as it's easy to get used to spending money in order to have fun. But it's really not necessary. You can still go window-shopping; just choose the free outside parking over the convenient and over-priced indoor parking. Go for a walk instead of going to see a movie. And invite friends over for lunch instead of dining out at your favourite restaurant. Try to get a week in every month in which you don't spend any money. It may sound impossible, but you'd be surprised at what you can accomplish if you put your mind to it (but not your money).

pack a lunch

Sit down with a pen and paper. Work out (you need only estimate, and your estimate will probably be less than the real amount) how much you spend on lunch every day. You'll probably be appalled at the amount of money you spend, for which you have nothing to show but a full belly and maybe a few extra kilos. Convenience food isn't good for your body or your waistline. Make a pact with yourself to start 'spending healthily', as well as eating healthily.

shop around

It's a mission, but it'll save you money. When it comes to relatively big purchases like household appliances, always go to at least 5 stores before you settle on your purchase. You'd be surprised at the price differences, which stores pile on because they count on lazy consumers who would rather buy immediately than look for the best deal. The same applies to clothing - factory stores can drive you mad, but you'll be a lot happier at the end of the month.

sell stuff you're not using

Anything from clothes to household items, which after buying, you figure out you don't really need. If it's in good condition, there'll probably be someone willing to pay money for it. And that money goes back in your pocket - if you're smart, it'll go straight into your savings account. It'll also do wonders for your state of mind.

put a limit on your cell phone contract

All service providers should offer you the option of a limit, and if they don't, it's worth changing. While you may think this heralds the end of your social life, a sensible way to work it would be to set a limit, which you then top up with prepaid airtime. You'd be surprised at how you'll cut down on unnecessary time and text messages when using your phone. It'll force you to think of your phone as a practical tool, rather than a mobile social club.

cheaper insurance

Make sure you know exactly what you're paying for on your monthly premiums. By taking away a benefit that may be unnecessary, such as a courtesy car if yours needs repairs, you can bring your premiums down quite drastically. Some insurance companies allow you to change your excess on your car insurance, so if you know you're going to be away for a month and your car is securely locked up, you can always put your excess up, which will bring your premium down for that month. Don't simply accept what insurance companies offer you - it's worth questioning them every step of the way.

how to shop responsibly

Tue, 19 Jun 2012 15:38:41 GMT

In most instances, your credit card is your friend. But for some shoppers, a credit card can become the friend who stays too long after dinner, the friend who steals your boyfriend, the friend who takes over your life and makes things miserable. Before things get out of hand with your new best friend, here are a few things you should know about buying on credit.

not all debt is bad debt

Your credit card is a tool. It allows you to be able to afford something immediately that you may not have budgeted for. Taking out a loan to buy a house, or to further your education are 2 examples of debt which you could call “good”. If your car breaks down and requires a repair that you can’t afford to pay in full, your credit card will come in handy. This counts as ‘good debt’ too, because you really do need the repairs in order to get to work every morning, and you will have something tangible and meaningful to show for the money you spend.

think before you swipe

Ideally, buying on credit should be a calculated purchase, rather than an impulsive one. You may think that an extra pair of shoes is a critical purchase, but at the end of the day (indeed, at the end of the month when your bill arrives) you’ll realise that you’re only lying to yourself. The best way to decide whether a purchase is worth paying off is to sleep on it. Try not to make any purchases on the spot. Apart from the mounting guilt, you’ll soon have a mounting pile of debt which will cancel out the possibility of any new shoes for quite some time.

know yourself

Nobody knows you better than yourself, although you may not want to admit it. But if you discipline yourself into keeping track of every purchase you make for a month, you’ll have a pretty clear idea of what kind of shopper you are. Being cautious with your spending doesn’t mean you need to turn into a control freak – far from it. By understanding how you make decisions when you’re shopping, you’ll find your financial affairs are far less stressful, because you’ll be aware of just how much you are spending, and how much you can afford to spend. The best way to keep track of your spending is by keeping a little notebook with you at all times. Write down everything you buy. If you find yourself clutching at straws trying to justify a purchase, chances are you don’t really need it.

the rainy day may already be here

Even the most un-financially savvy person could tell you that saving is exceptionally important. If you’re disciplined with your savings, you shouldn’t find yourself freaking out in the face of an emergency. But emergencies come and go, while the interest you’re paying on your credit card won’t. Keep some money aside, but if you can use your savings to pay off your debt. It will serve you better in the long term than not touching your savings and paying only the minimum amount you owe on your credit card. In almost all instances, the interest you pay on your debt will outweigh the interest you earn on your savings account, so you will continue to steadily lose money.

get rid of the big one

Pay off the debt that is charging you the most interest. Interest on debts like mortgages tend to be lower than interest you pay on your credit card, so when you’ve got a little extra cash and you’re trying to decide where you should put it, always pay off the account that’s charging you the highest interest. Once you’ve paid that one off, pay off the account that’s charging you the next highest interest rate. And so on, until your balance is green, fat and healthy.

the minimum isn’t good enough

Your credit provider will indicate a minimum amount due, but don’t be fooled by the jargon. If you can afford to pay more than the minimum, do so now, without hesitation. It will save you heaps of money in the long term. Remember, a purchase made on credit is a purchase made with money you don’t have. The sooner you pay it off with money you do have, the more money you will end up having at your disposal.

if you need help, ask for it

Life is life. Sometimes things get out of hand, for whatever reason, and you’ll feel like you’re not coping with your debt. Swallow your pride and speak to your bank about developing a strategy to deal with your debt. Sometimes you forget that they’re there to help, and when they’re sending you nasty letters it can be very intimidating. The sooner you speak to them, the sooner you can sort things out. Banks are run by humans, not machines. They will understand.

don’t compare yourself

You may go out to lunch with your best friend and notice that they’ve just got a brand new car. They’re the same age as you, with the same amount of experience, so you figure if they can afford a new car, you can too. Same goes for that handbag. Right? Wrong. People are individuals, and the same goes for their financial situation. You friend may have an extra resource or two, like a trust fund, or even an extra job on the side that they’re not telling you about. As soon as you catch yourself comparing yourself with other people, stop. What works for someone else won’t work for you, and vice versa. Rather draw up a plan of action in order to earn the money you need. Ask for that promotion or raise, and draw up a list of reasons as to why you deserve it. Or start your own business.

are you a compulsive shopper

Tue, 19 Jun 2012 14:55:26 GMT

This is a basic checklist of common attitudes and behaviour in people who do have a troubled relationship with their credit cards.

When something goes wrong, I like to head to a shopping mall. Same goes for when I’m angry or scared. Shopping usually makes me feel better.
My shopping has caused some problems in my relationships. It’s because the people around me don’t understand what I’m going through. If I buy something, it’s because I deserve it, after what I’ve just been through.
I often buy items with my credit card that I wouldn’t pay cash for.
When I shop I feel happier than when I’m doing anything else. Sometimes this feeling gets mixed with a little anxiety, but then again almost anything to do with money makes me feel anxious.
I enjoy shopping because for me, it’s a thrill. I may not have lots of money, but acting as if I do gives me a bit of a rush. I know it sounds weird, but hey.
Sometimes when I get home after a heavy day of swiping I feel guilty and ashamed. I also feel confused, like I’m not entirely sure what happened in the shopping mall, or why I bought what I did. I do my best to get rid of these feelings.
Sometimes I buy things that I wear or use once, and sometimes I don’t use them at all. Just having them in case makes me feel better. I’ve got some clothes in my cupboard that still have the price tags on them.
I sometimes lie to my friends and my family about how much I spend, because if I didn’t they’d ask questions I’d rather not answer.
I think about money all the time. I think about how I wish I had more, about how much my friends have, and about how much I owe. You might say I think about it more than anything else. And then after thinking about it, I like to take my mind off it by shopping.
I spend a lot of time juggling accounts and bills because I have so many. Most of my financial matters are damage control. I loathe opening accounts, they make me feel sick.