Many of us might be guilty of being shoppers who spend without thinking or planning . . . even of being compulsive or emotional shoppers.
Shoppers such as these may find themselves stuck with serious money problems later on.
Eunice Sibiya, head of Consumer Education, said thoughtless spending contributes to financial problems.
“If shoppers don’t know what they have spent their money on at the end of the month, it is unlikely that they are making positive and planned financial decisions,” she said.
Ask yourself these few questions to ascertain if you are guilty of thoughtless spending:
How much money is in your bank account right now?
Do you know how much is in your current bank account or how much you owe on your credit cards, store cards or home loan? Most people should have a good idea of these balances at any given time.
Do you look at price tags?
According to an online survey done by FNB, 6% of respondents never check the price tag of an item when they make purchases, 30% sometimes check and 64% always check.
“Taking note of an item’s price habitually will ensure that you are aware when the price has gone up, if there are any deals on similar consumables or if you can go without that purchase occasionally,” said Sibiya.
“Checking the price of every item will take only a few seconds, but can have a real impact on your spending at the end of the month.”
Are you buying items you should be saving for?
“It is natural to get excited about purchases such as a new couch or the latest TV, but unfortunately this is when many of us throw caution to the wind, and financial planning goes with it,” said Sibiya.
“Saving for an item will not only be cheaper but will also give you the time to shop around for a great deal or even buy the item secondhand, which will leave you with cash to put away,” she said.
Are you spending without actually thinking?
Spending without thinking is not limited to actual purchases, but also to other behaviours we might not be aware of: “There are many examples where a small change in behaviour can save you money at the end of the month,” Sibiya said.
She cited actions such as incurring many banking fees because you draw cash often; spending hours surfing the Internet on your mobile phone; or leaving the lights on.
Paying attention to how and what you spend money on will give you a very good start to financial freedom.
