We’ve all been caught red handed in the red, but some of us seem to find it harder to extract ourselves than others. OHbaby! shares some tips to help you get back in the black.
Focus on your saving incentives. With a BNZ Rapid Save account you’ll be rewarded with bonus interest for every month you make a deposit and make no more than one withdrawal. Enjoy the satisfaction of watching your bank balance grow rather than deplete.
Banish your credit card. Put it in a drawer, the laundry, the freezer – anywhere to ensure it doesn’t go with you when you shop! And decrease your limit as a back up. This may not sound all that clever, but it’s actually common sense. Credit cards are generally the method we use to spend money we don’t have, and the interest we accrue we can’t pay them off only adds to the pickle. Obviously it’s not the person holding the plastic not the plastic itself that’s the problem, but whatever you can do to decrease your dependency on your credit card will help you in the long run. Some find it helpful to put their credit card to use in a more creative way – as an ice scraper, a cake knife, a bookmark or a guitar pick. In any case, just make sure your credit card is working for you, not against you.
Make your money visible. For some people it’s just too easy to spend when the funds are ‘invisible’. A sobering way of curbing your spending is simply to withdraw your money for the week/fortnight in cash, and then separate it into envelopes labelled with key expenditures such as food, transport, essential bills, clothes, activities… It makes budgeting much simpler, as you can physically see the limitations on your spending, and exactly how much you have left. At the end of the week/fortnight you’ll hopefully have some cash left over – which can help relieve the pressure next time round! Once you’ve got the hang of this method and feel you can go back to an eftpos card, consider opening a BNZ YouMoney everyday account and using it in combination with internet banking. It comes with up to 25 accounts so you can use one for each of your goals and expenses – just like the envelopes. You can allocate your own picture to each account, and quickly drag and drop between them, so it’s a simple, intuitive way to keep track of what’s going on with your money.
Have a cooling period. When you see a product you really like it can be difficult to differentiate between a want and a need. Decide on an appropriate length of time that it would take you to make a wiser, more considered decision, and don’t allow yourself to buy it before the time is up. In the meantime ask yourself honestly if you can live without it, research more economical alternatives, and calculate how much interest you’d save by paying off debt with that money instead!
Ask yourself some hard questions, and then give yourself some brutally honest answers. Is your spending getting out of control? Can you see trends in your over-spending? Why is it, really, that you’re buying what you’re buying? What does the stuff you’re buying represent to you? Are you possibly trying to gain identity or security with what you buy? You may not like the answers to these questions, but at least you can start addressing the root of the problem instead of the symptoms. This conversation may be easier to have with a close friend. They might be able to identify something you haven’t seen, and they can then keep you accountable and encourage you going forward.