-By Sunel Veldtman
New Years’ resolutions are so tiring. Few people stick to them. Loose weight. Spend less. Be more organised. And then we carry on after a few days or weeks just as we did before.
Better budgeting is high on the list of new years resolutions. Prioritising and limiting spending is key to financial freedom and wellness. Not only for those who have little but even more so for the wealthy.
Here are a few pointers to start a New Years’ resolution about your spending:
Spending plan vs. budget plan
Budgeting is such a negative concept. It sounds so restrictive. Why don’t we rather call it a spending plan? It is a positive concept. What can I spend my money on? Rather than how should I restrict my spending.
It puts you in control of the money flowing out of your bank account. Unless you live in absolute poverty and your basic needs are not met, you have wide open choices about your spending plan. And you need priorities like most people. We resent having to make choices but it is the reality of adulthood.
Start by looking back
Take three to six months’ worth of bank statements and categorise the expenses into broad areas like car/petrol, home, education, charity, travel/holidays and fun. This will quickly show you where your money is flowing. The numbers will tell you a story. Is this the story you want it to tell? Where is your money flowing?
Know what you value
Your money will only make you happy if it flows in the direction of your values. Do you know what you value? If you don’t, do an online values exercise.
If you value beauty make sure, that regardless of how tight your money situation is, you have some money to spend on this value. It might be one bunch of flowers or cards for writing birthday messages.
You might value security in which case you may want to build a fat bank balance to feel safe. Or you might value education, so you will be willing to sacrifice driving a nice car.
The importance of knowing what you value and arranging your spending around this, is that you feel in control. It was your choice.
It is your choice to prioritise certain spending over others as you give prioirty to your values. It is also helpful when you have a partner. Understanding how your values differ can help you have meaningful conversations.
Who is talking to you?
For many people, it feels like an outside voice prescribes how they should spend their money. It is true. Budgeting is where all our accumulated money messages come to play. If you have not been mindful about why you do what you do with your money, it is probably true for you. Think about the messages that play out in your bank balance. What are they? Think about message about risk taking, security or your career. Whose voices are talking to you when you spend your money? Parents, teachers, pastors or the boss?
When I received my first paycheck, my dad said to me, ‘It is not what you receive that will decide what you have left at the end of the month, it is how much you spend.’ This is a true and helpful message. I have also received other unhelpful messages that left me thinking that wealth is dangerous or detrimental to your life. These were unhelpful and harmful to me. I’ve had to let go of those messages.
Think about the messages playing out in your spending. Discard the ones that are no longer helpful.
Then as you spend, be mindful. Just take a few seconds to think about it. ‘I just spent R30 on a coffee.’ Or ‘R10 000 on new tyres for the car.’ ‘Or R1m on upgrading the holiday house.’ Do not judge your spending. Just let the thought enter your head.
And see what happens.
Happy spending in 2018.