Another great post from my colleague Mikelann Valterra. Why reinvent the wheel, when she has said it all so eloquently!
Creating Gloriously Boring Savings and a Money Ninja trick to pull it off.
4 Reasons Why Having “nothing to wear” is NOT a Disaster! ….nor a Justification to go out and Buy Something!
May 11, 2012
You know the one… You’ve been invited to a wedding, birthday party, company dinner, or in fact just about anything… and the first words out of your mouth are…”But, I’ve got nothing to wear!”
Now, that is patently not true, because:
a) you have not spent the whole of your life in bed, naked, and hiding under the covers nor
b) walking around in public naked. This is not acceptable behaviour in most modern societies and you would probably have been arrested or taken to see a doctor!
What you really mean is: I don’t know what to wear, or, I don’t want to wear what I have,
and this seems like a justifiable excuse to buy something new!
It is not a disaster for the following reasons:-
- Firstly, the definition of disaster from Dictionary.com is: a calamitous event, especially one occurring suddenly and causing great loss of life, damage, or hardship, as a flood, airplane crash, or business failure. No mention of not having anything to wear!
- At most functions you attend, you are not the centre of attention…( unless of course, it’s your wedding)…and very few people will notice what you are wearing. (NB If it is your wedding, that is a justifiable excuse to buy something new. I am assuming that you will have been planning it for some time and have the savings to go out and buy it!)
- The occasion is not a fashion show …well not usually anyway…and almost always, it is about people celebrating the occasion. That means that you have been invited for your company not your clothes! Therefore, “that old thing” is probably going to be perfectly suitable.
- Unless you are the Queen, or Catherine, Duchess of Cambridge, chances are that nobody will realise that you have worn the outfits in your wardrobe before! People are just not that observant. More importantly they are pleased to see you, not your clothes.
Of course, if you have planned to buy a new outfit, because you truly need it ,and not just want it, it is lovely to be able to wear something new to a special occasion. We all love that.
However, if it is not in your plan, especially if you are trying to stop overspending or reduce your debt, an invitation to an occasion does not justify buying something new to wear. Remember it is about the people and the celebration, so “that old thing” will be just perfect.
Tell us about any creative ideas you have, that gets around this common situation.
As you know I do not give any advice on investing but feel this article, thanks to www.goldengirlfinance.ca, gives some excellent general principles.
Also many of my clients, as I did( do??), have very big issues with instant gratification! Enjoy the read.
Time, money and marshmallows | Personal Finance | Golden Girl Finance.
Do you have, or know someone who has, problems with delaying gratification? Share your story and/or thoughts here.
8 Wise Tips on How to Avoid Overspending …
May 2, 2012
Have you ever opened your credit card bill and been absolutely shocked at how much it is? Worse still, have you ever been too scared to open it, knowing you were going to be shocked? How about going into your wallet and going “where did that $100/$200/$300 etc go? We call this being in the “money fog”! Essentially not having any clue how much money we are spending or have spent.
The money fog is almost always worse when we’re using credit cards, because the spending is often unconscious. In other words, you don’t really have to think about it, you just hand over your card without even considering what the balance already is. Provided you’re not at your limit you can easily do a day of retail therapy, or compulsive shopping, without giving the total amount spent another thought! You can just shop until you drop! Whilst you can also be in the money fog when using cash or debit cards, reality is closer at hand! You will either run out of money, need another trip to the money machine, or your debit card or EFT POS card will be rejected. Your spending therefore has to be, if not completely , at least partially, conscious.
Conscious spending is being aware of, not only how much you’re spending, but also being aware of what you’re buying! Do you really need it, or have you just seen it and want it, RIGHT NOW?
I know that when I was at the peak of my overspending, I could have a day out shopping without giving a thought to how much it was costing, or if I really needed what I was buying. As I was a very regular Internet banker ( I had to be, to keep juggling my money!) my shocks at how much I’d spent came pretty early on! The unneeded purchases were often obvious very early on too! I might have “needed” a painting but did I need ten?
As the reasons you overspend, or shop compulsively, are many and, often, complex there isn’t a quick cure. However, if you only use cash or debit cards, the harm you can do is minimised. The other key is tracking your spending, that is, write every single cent you spend down.
If you are concerned about your spending or any of this, please seek help. The Financial Recovery℠ Institute has a list of counselors http://www.financialrecovery.com/?p=find-by-area. If you cannot find one in your area I, and a lot of my colleagues, offer counseling by phone or via Skype.
Do you have a story of being too scared to open your credit card bill? Please share it with us below in the comments section.
Don’t you love to see things, reduced in price, just when you need or planned to buy them? This is a true bargain.
But what about the stuff you didn’t plan to buy? You know the ones… “It was such a bargain, I couldn’t pass it up”,
“but it was on sale”. I’ve done it more often than I’d care to admit and justified it. I’m sure, many of you have too. We’re lured into the purchase by the sale signs!
However, there is a saying:
“You can’t have too much of what you don’t need”. In other words if you don’t need it, you probably shouldn’t be buying it, no matter how much of a bargain it is!
This comes into play particularly, when things are on sale. Retailers know that most of us are attracted to bargains; valued items which we see reduced to “sale price”.(That is the price which the retailer knows will get it moving out the door, as fast as possible!) This appeals to our psychological side. We get an extra emotional “hit” when we think we are getting something cheaply. It makes us feel good. For those of us who use shopping or buying “stuff” to fill some unmet emotional need, this is mana from heaven! Not only can we buy it, but maybe we could buy two (for the price of one!) or buy this AND something else (two hits for our buck!).
You may have an earlier post of mine http://wp.me/pDpjD-10 “Do you REALLY need it or just want it?”, which tackles this issue in more depth. Suffice to say, it is very important that we differentiate between our needs and wants when making buying decisions. I know that I used to buy things and tell myself I “needed” them; the reality was that I just, at that moment, “wanted” them. Sometimes I’d get them home and know almost immediately that I’d never wear that colour, style or whatever! I was purely lured into the purchase by the item being on sale, or just my need to buy something to satisfy some other unmet, often unrecognised, need. The retailer had won again.
So, if you really do NEED something and find it on sale, well done, you’ve truly got a bargain! However, if you have just bought something because it was on sale, you could have saved yourself more money, by simply not buying it!
I’d love to hear your stories about some real and imagined bargains you’ve got, in the comments below.
Are you attracted to advertisements for savings accounts?
April 16, 2012
For a few weeks now I have been watching an ANZ bank ad on television, and questioning it.
You know the one with the young woman and the bubbles above her head… which say ” I deserve a little splurge”, “I’ll buy myself an early birthday present” “It won’t be on sale for ever” and “I’ve had a couple of hard weeks”.This is a link to the web version. https://comms.anz.co.nz/serioussaver.html?pid=mkt-pbr-ad-hp-jan12-serioussaver
This bit I really get. I used to use variations of each and every one of those statements, as justifications for my overspending and putting more “stuff” on my credit cards. I knew a whole lot more I can tell you. So too do my clients now, those who are overspenders and/or chronic debtors! They know these excuses and variations of them eg. “I should be getting a bonus next month” ” I need this as I haven’t got anything to wear to Jo’s party, Sue’s wedding…” or whatever.
They are all examples of justifications or excuses for spending money when, on some level, we know that we shouldn’t, we know we can’t afford to and/or we know that other people probably wouldn’t be doing it if they were in the same place as us, financially that is.
The bit I don’t get is, that the person using those excuses would be drawn away from their overspending habits, by a savings account with a good interest rate and some other positive benefits.
Maybe some would see the error of their ways and start saving instead of spending, but I know I wouldn’t have and nor would most of my clients. The reality is, that if you are an overspender or chronic debtor and using those justifications for your spending, in almost all cases you are struggling to pay your bills and debts and there is little money left over to save, if any.
The ANZ ad says ‘Saying no to temptation has never been so satisfying”. They may well be right; saving instead of spending is very satisfying. I just need a lot more convincing that the young woman in the ad, if she is using all those excuses for her spending, will be tempted by the prospect of saving and earning “up to” 4.5% interest. Taken altogether, those excuses spell to me a problem with overspending, which is not insignificant and requires some expert assistance.
I would be interested to hear your comments.
Paying off your credit card….once and for all!!
April 12, 2012
From my last post you have seen I recommend that, unless you pay your cards off in full each and every month, you use debit cards.
Now that’s all very fine but, what if you already have a credit card, or cards, which have balances on them which you can’t pay off in full. What do you do then?
The first thing I recommend is, stop using your credit cards immediately. There is a saying which is very pertinent here:
” If you wan
t to get yourself out of a hole, first you have to stop digging”.
In other words, you can’t hope to get your credit cards paid off, whilst you are still using them and increasing your debt. Once you stop using them, the amount you pay off them then actually starts to make a difference. How you go about paying them off was the topic of another post of mine http://wp.me/pDpjD-2p. Essentially I recommend that you pay the minimum off them, until you have savings that will cover all periodic expenses you have, or will have. As I say it is the subject of another post!
For those of you who are now saying ” This doesn’t help me, because I have to use my credit card just to buy my groceries or kids’ clothes”
OK, what I suggest for you is that at the beginning of each month, you sit down and draw up a spending plan for the month ahead. Now if you are really serious about paying off your credit card(s) for good, this plan should address all the real needs of your family, namely, shelter, food and essential clothing, but not include wants eg new flat screen TV etc!! Once you have this drawn up, if there is a gap between the money you bring in and the money required to fulfill those needs, that is the amount you may put on your credit card. This amount is planned, which is the key word. This does not mean that you can see a dress that you just love and buy it with your credit card. The dress is not a need, and it’s purchase is not planned. You would also benefit from seeking the assistance of a Financial Recovery℠ Counsellor. You will find a list of them here:-http://www.financialrecovery.com/?p=find-by-area
Do you draw up a spending plan or budget at the beginning of every month? Do you stick to it? I’d love to hear your experiences.
Debit Card or Credit Card??
March 27, 2012
For my money, debit card all the way!
Why….I hear you ask?
When using a debit card the money comes straight from your cheque account, therefore if you don’t have the money, you can’t buy it! It makes all of your spending conscious and eliminates the money fog! Even if it doesn’t eliminate it completely, it certainly doesn’t allow it to hang around! If you hadn’t planned the purchase, the next time you update your bank account and tracking ( you do track your income and outgoings, don’t you??) you will have to record, and adjust your budget or plan for the purchase.
On the other hand, if you use a credit card, the pain of the payment is delayed and the spending is more often than not, unconscious. You don’t feel as though you are using “real money”, it doesn’t cause any immediate reflection or reaction and allows the money fog to close in, big time!! Most credit card companies allow you up to 55 days before you make a payment, so until that day comes around, or at least until the bill comes in, you can forget all about your purchase, and probably will.
A debit card still allows you to shop online, or over the phone; excuses people use for needing a credit card.
When I discuss the issue of debit card versus credit card with clients, most say “But I get airpoints, when I use my credit card”. That is great if you are paying off your credit card, in full, every time you use it. If you aren’t, then the interest you are paying would more than buy you the airpoints, or flights or whatever!
If you pay off your credit card every time and in full, this probably doesn’t need to apply to you.
However, if you don’t, then I strongly advise using a debit card.
Make sure to discuss any money problems with your other before they become your significant other!!
March 22, 2012
One of the most common reasons couples come to see me is disagreements over money. This is not surprising as it is one of the leading causes of divorce.
So the statistics are against you to start with….imagine how they escalate if the issue is something you have hidden from your significant other, especially if it was an issue before you committed to one another!! This is particularly if your problem is with debt. Discovering unknown debt, particularly if it is a large amount, can be a real honeymoon stopper! It can even be a marriage stopper.
I know that when I got together with my partner, my overspending very quickly became an issue between us. In fact, it was really why I finally found help to deal with it. Now, whilst we still have very different attitudes to money, they’re out in the open and we can discuss money with that knowledge. Now, I’m not saying it makes it easy!! It is however, less fraught than it would be, if it had come to light once we had committed to one another.
So, if you are just developing a relationship with someone who, you think, might be “the one”, find a time when it is just the two of you, maybe over a quiet drink, meal or coffee and begin to talk. You can start by simply asking ” Do you think of yourself as a spender or a saver?” Ask them about their money goals, do they have any? Inquire about their debts – do they have a student loan, how big is it? Do they have credit card debt, again how big is it? Do they save for something or just put it straight on a credit card. Obviously it is better if this is a two way conversation and not an interrogation!! Share with them your goals and attitudes towards money and if you have any debt. It is better to be out in the open.
If you’re reading this and thinking ” Great, but it’s too late for me, we’re married and he/she doesn’t know that I have $15K of credit card debt” Tell them NOW! The sooner the better. It is always better if you tell them than they somehow find out on their own. The deceit then somehow just seems worse and is more damaging to trust in the relationship. Your partner could then be thinking “What else have they hidden from me?”
So, be proactive and discuss your attitudes to money before your move in together or get married….trust me it can save a lot of heartache!
If you have been in either situation, please share your experiences in the comments section below.
