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HOW TO CHANGE OUR SPENDING BEHAVIOUR

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Pule Hlahane, a teacher, says while saving is good, it is also good to spoil ourselves once in while.     Photo by             Kopano Monaheng
Pule Hlahane, a teacher, says while saving is good, it is also good to spoil ourselves once in while. Photo by Kopano Monaheng

THE economy might be tight but we all need to spoil ourselves once in a while.

Pule Hlahane, a teacher at Emshukantambo High School in Pimville, Soweto, said: “Giving yourself a treat once or twice a month is okay as long as you don’t overdo it.”

Pule used to take his family out every weekend for lunch but decided to limit it to every second weekend and use the money to buy groceries instead.

Takumi Daling, of Standard Bank savings and investments, said the secret to good financial habits is to watch spending.

“A lot of people approach personal finance purely as an exercise, putting much effort into compiling detailed spreadsheets that record every bit of income and expense.”

While there is merit in this approach, the truth is managing your finances is more about changing your behaviour than about recording your transactions.

According to the Reserve Bank Quarterly Bulletin from March, gross saving, as a percentage of gross domestic product fell to 15,8% by the end of last year. This meant that less than 16 cents of every rand earned is saved.

It also shows that household debt-to-disposable income rate in Mzansi reached 71,9% last year. This means people are spending more on debt as part of overall spending.

Behaviour advice

The 50-30-20 rule

The rule states that 50% of your after-tax income should go towards covering basic needs such as housing, electricity, food and water.

The next 30% should be used to cover wants such as clothes, haircuts or restaurants.

The last 20% should pay off debt and save for retirement.

Gratification delay

If you’ve already used your budget to buy a new dress or the latest gadget, delay your gratification until next month before giving in to instant gratification by buying on credit. This is probably the most difficult part of change.

Beware confirmation bias

We all tell ourselves what we want is true or necessary, but it is not always the case.

Defeat confirmation bias by accepting the unpleasant side of the equation too: You will not ride more with a new bicycle. You will not lose weight tomorrow by eating cake today.

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