‘How we spend money is actually an emotional issue,’ says Smita Talati, author of How To Be A Financial Goddess (Hodder & Stoughton). ‘Whether we like to admit it or not, we often link how much we earn with how successful we are. Therefore, for many of us, the more we can afford to spend – whether we decide to splash out on a designer dress or hoard the cash away – the higher our self-esteem. However, money doesn’t have to be a weapon you use to improve your happiness. Spend and save in a realistic way and you’ll also feel happier about life.’
To find out your spending style, answer these questions, then follow Talati’s advice for getting a healthier bank balance and state of mind.
1. YOU JOINED THE GYM SIX MONTHS AGO. HOW OFTEN HAVE YOU BEEN?
Twice – in total. You’re busy. But just owning a membership card makes you feel fitter.
Every day for the first two weeks. And about once since then.
Three times a week. You’d like to go more, but at least it’s a realistic aim.
A few times before you cancelled your membership. It’s cheaper to cycle to work or go running at lunch time.
2. YOU GO FOR A MEAL WITH FRIENDS. WHEN THE BILL ARRIVES, WHAT DO YOU DO?
Pay just for what you ate.
Take charge and divide it up fairly, including a tip.
Go along with everyone else. Even though you only had a main course, however the others decide to split the bill will be fine with you.
Pay an equal share – but wish you hadn’t pushed everyone into ordering that fourth bottle of wine.
3. YOUR BEST FRIEND HAS BROKEN UP WITH HER BOYFRIEND. HOW DO YOU CHEER HER UP?
Pour her a large glass of chardonnay and lend her an ear until she feels better.
Buy her dinner and some spoil-yourself cocktails.
Organise a girls’ night out. The last thing she needs is to sit around the house moping.
Remind her that it’s the first week of a break-up that hurts the most – she’ll feel much better by Monday and then you can go out dancing.
4. IF WE OPENED YOUR WARDROBE, WHAT WOULD WE SEE?
A jumble sale! It’s packed to the rafters. Highlights include six pairs of jeans, five of this season’s sparkliest tops and a couple of posh dresses you haven’t had a chance to wear yet. (There just aren’t enough parties in the world.)
Classics that never go out of fashion. In fact, you can’t remember the last time you bought a new top.
A neatly organised capsule wardrobe: crisp white shirts, tailored black trousers and some trendy accessories that will update your look.
Mostly chain-store stuff. And a pair of designer shoes that cost so much you haven’t had the courage to wear them out of the house yet.
5. WHEN YOU GET YOUR HANDS ON A NEW ISSUE OF COSMO, HOW DO YOU READ IT?
Pretty methodically – from front to back.
You dive straight into the fashion pages – you love to think about what you’ll be buying this month.
Irma Kurtz and the real-life stories interest you most.
You immediately look for the big features that really grab your attention, before reading all the other bits.
6. IT’S YOUR PARENTS’ 30TH WEDDING ANNIVERSARY. WHAT DO YOU GIVE THEM?
A card and some flowers. They never expect to get a massive present from their children anyway.
A night for two at a smart hotel. They deserve it.
You thought about getting them a weekend trip back to the spot where your dad proposed – but ended up buying them a photo of it from e-Bay instead.
You went halves with your brother on a fancy, romantic meal for them at their favourite restaurant.
7. YOUR MAN HAS SUGGESTED GOING ON A HOLIDAY TO THE CARIBBEAN. THERE’S NO WAY YOU CAN AFFORD IT. YOU:
Book it anyway and put it on a credit card – you can always deal with it later.
Agree, then get depressed when you realise you won’t be able to afford any new clothes for the next three months.
Suggest you go for the trip next year instead. That way you will both have time to save – and can do it in style.
Ask if he fancies a week in Mpumalanga instead. It’s cheaper and there is more wildlife there than in the Caribbean.
8. THE LAST TIME YOU CHECKED YOUR BANK BALANCE WAS…
This morning. You check it daily on the Internet.
Yesterday, to make sure your cellphone service provider hadn’t taken out more than it should have.
Last Monday, after you went a bit mad over the weekend.
A few weeks ago – you only like taking a look when you know you’ve been paid!
WHAT’S YOUR FINANCIAL STYLE – FLASHER OR STASHER?
Mostly Blue: The Fantasist
You’re a financial fantasist who spends what you don’t have and ignores your bank statements. Friends may envy your live-for-the-moment attitude, but you could find yourself in debt if you don’t check your spending habits now. You think your bank statements will confirm you can’t have the lifestyle you deserve, but you can – as long as you make some compromises every day. So take a deep breath and set yourself a realistic weekly spending budget. If it’s R500, take that amount out in cash each Sunday night, then hide your cards away. After three weeks you’ll realise that what you save by eating breakfast at home (instead of in a coffee shop on the way to work) can be used to buy a sexy new top. Good luck!
Mostly Pink: The Planner
As a planner, you know to the cent how much is in your bank account, your bills are always paid on time and you even file your receipts. You never spend what you can’t afford, so your financial future is looking about as sunny as that fortnight in Mauritius you’re going on (thanks to that R200-a-week holiday account). However, such perfectionism does show that you’re a bit of a control freak. If you’re not careful, you could drive less-organised friends mad, so don’t preach at them when they only have R20 left the week before payday. And why not take a risk every now and then? Letting go can be liberating. Next time you plan a girls’ night out, let someone else take charge. What do you have to lose?
Mostly Purple: The Guilt-Tripper
As a guilt-tripper, you buy things you don’t need, panic, then take them back. You love the buzz of blowing cash on something lavish, then realise your money would be better spent on rent. Keep a spending diary for two weeks, where you write down every purchase you make, along with the emotion you felt at the time and your mood after the spending high has died down. You’ll soon see that you put yourself on an unnecessary emotional roller coaster. You could enlist a friend to be your ‘money mentor’. The next time you insist on splurging, talk to her about why you’re doing it. Reward yourself by having a monthly treat day in your diary, which you save for, then buy something you really want.
Mostly Green: The Hoarder
You’re very tight with your money. On the upside, you’re never in a financial squeeze. However, the fact that you leave the bar just as it’s your turn to get a round probably annoys the hell out of your friends. (Oh yes – it has been noticed.) More importantly, your stingy attitude means you’re not being fair to yourself – you never treat yourself because you don’t think you’re worth it. You need to realise it’s okay to enjoy your earnings. Put aside a sum you can afford each week – this is your ‘me’ money. You must spend it all on yourself before the next Monday morning. Have a manicure or start a new hobby – creative writing, ballroom dancing or pottery. You’ll discover that money can bring fun – and no, it won’t hurt.