This topic is perhaps a little out of my comfort zone – raised with the idea that you don’t talk about money in public. Which is weird because in private, it was often the conversation at the dinner table. My family came from nothing and built a successful business over the years. My father ran two very successful companies and it was always very important for him and my grandfather that I understood how money worked so that I could take care of myself “one day.” Well, that day is now and I think I do a pretty good job of taking care of myself to be honest.
I know everyone’s financial situations are different but I watch a lot of people make decisions with their money and I struggle to understand them. Fancy cars, cell phone contracts to get the most ridiculous phones, take out dinners paid for on credit…all part of decisions that don’t make sense to me.
Large amounts of money spent that can’t grow in value isn’t sensible to me. I think cars are often about status and it’s not something that I would personally feel like was a good investment. A good, solid, safe and reliable car yes. A completely unnecessary car that means you can’t pay your other bills, definitely a no.
If I’m honest, I don’t like to talk about my own personal finances which is silly because managing and growing money is actually something I’m pretty good at. One thing I hate though is people who think they know everything and want to tell you how to run your life. This isn’t that at all.
I think it’s empowering to know how to spend your money
I read a lot about finances and money on places like Money Sack and I know a fair amount of tried and tested ways to make your money work for you and I thought I’d share my money rules.
My money rules
I am ridiculously practical when it comes to money but I have a few money rules that really work for me. They might not work for everyone and you might not agree but this is what has worked for me.
- If it seems too good to be true, it probably is. Don’t buy in to bull shit investment schemes.
- Save before you spend any of your money! – Saving will change your life. That money will be there to rescue you when you get retrenched. They will pay those unforeseen bills and they might even take you on a holiday when you really need one.
- If you invest money, try not to spend all of the interest that you earn on it and do your best not to touch the actual original amount. If you don’t know much about investing in stocks, it might be worth checking out a website like stocktrades to learn more.
- Only ever lend money that you are okay with NOT getting back. Relationships end when people lend money to friends or family who don’t pay that money back. It’s an ugly truth but it’s true in so many cases. People get resentful. Simple solution, if someone needs money, either give it to them as a gift or don’t give it to them at all. If you don’t get it back, what is perhaps a good relationship will be strained. “Neither a lender nor a borrower be” has saved my life and probably countless relationships.
- Don’t ever compare yourself and your financial situation to anyone else. You will most likely never be the richest person you know (unless you’re Bill Gates) and constantly comparing yourself to them will only make yourself feel inadequate. however, look at how the people you admire make their money, learn from them.
- Don’t spend money you don’t have on shit you don’t need. Do not use your credit card to buy things that don’t grow in value in some way or other. Never use your credit card to buy take out or anything else that isn’t an actual investment. Many things you think are an investment actually aren’t. Like the latest iPhone. If you can’t afford to buy it with cash lying around, it’s probably a bad idea to buy it.
- When buying property, rather buy a smaller house/apartment in a better area than a huge house in a terrible area. Buy the best property you can afford in the best neighbourhood, even if it’s the smallest one in the area. Over time, your investment in the better area will pay off big time. Property is a good investment and if you can afford to buy a place, then do. Pay as much towards your bond as you can afford to when you have the money, so that if you struggle in the future, you’re already doing okay!
- Invest in the best quality items that you can afford that will last a long time. It’s not necessarily a waste of money to buy a few good quality clothing or furniture items that will last a decade over ten items of rubbish quality that will need to be replaced.
- Never ever invest in fad items. If something is very seasonal, buy the cheap/budget version of it because it probably won’t be in style this time next year.
- Don’t feel bad about occasionally spoiling yourself. Sometimes you deserve it, just try not to do it using your credit card.
- Don’t spend money to impress anyone. You don’t need to buy a bottle of champagne to make yourself look fancy. If you want to and you can afford to then cool but no one is ever really impressed by the guy showing everyone he can buy champagne.
- Never EVER make anyone feel inadequate because they have less money than you. It’s NEVER okay to make your friends feel pressured to go to a fancy place they can’t afford. Don’t split the bill if they only had a starter and a glass of water in a restaurant and you had six courses and a bottle of wine. Be considerate of how other people feel.
At the end of the day, life is short so do what works best for you. I just think it really helps to have a better life to not have to constantly worry about paying off a credit card that you grew through the roof at the McDonalds you know what I’m saying?
Don’t go crazy, or do but know that people aren’t impressed by your wealth so much as by your kindness and consideration. Be humble. No matter what your financial situation is, always remember that over night, everything could change and you could be in any position.
Be good to the people on your way up and they’ll be good to you on your way down.
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I prefer to be realistic when it comes to my finances. If I cannot afford it now then buy it when I can. I don’t need the most expensive phone or tablet, because the “cheaper version” does the exact same things as the most expensive ones. I prefer putting money into my savings account when I can. And if you really need to flash money around to impress people then are they really worth being called friends. I’d rather live modestly than flashing around expensive stuff and drowning in debt. Just buying groceries itself is costly. I believe spend within your means, save even if it’s just a R100 a month and yes spoil yourself once in a while, even if it’s just a cup of coffee.
Saving is definitely important no matter the budget and I absolutely agree with you, they aren’t your real friends if they need to be impressed by your flashing money! Something I wish more people would get!
We battled to sell our previous house in a small country town.
There was Ponzi scheme. The consultant came to try to sell his sounds too good to be true product to us.
So many people fell for the touted double the usual returns. Then there was a glut of houses on the market, from people desperate to get out of the hole they dug.
Oh wow, that sounds really horrible!
My brother also lost a huge amount of money “investing” in something that he was told was too good to be true.
I think people are so quick to fall for get rich quick schemes but there really is too much risk involved!
I can see we are going to struggle to sell our house too. There are so many houses for sale in my street with everyone panicking!
Girl, you know I needed to read this, so thank you for sharing.
I have jotted down these tips and am going to use them.
Ahhhh I’m so glad you find this useful! xoxox
Cool rules. Number 4 is my favourite and it’s a life saver for me at least.
Thanks Melissa! Number four has made my life so much easier – it’s a lot easier saying no sorry I don’t do that ever than trying to find an excuse. And if I can help, then I do but it’s never with expectations!