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Cape Town - When it comes to spending, you don’t have to deny yourself all the things you love and want. You just have to be smart about what, how and when you buy, says Michelle Dickens, the managing director of registered credit bureau TPN.
And the more you understand how your credit profile affects your life, the more responsibility you’ll take for the way you manage your finances, says Dickens.
From financial flab to fiscally fabulous
Dickens lists 10 steps to go from financial flab to fiscally fabulous:
1. Start by getting a credit record of some kind. Open a store account or a credit card with a low credit limit. If you have no credit record at all, financial institutions don’t know whether you’re a good risk. They’ll charge more until they have a better sense of your credit behaviour.
2. Take up window-shopping. It’s just as much fun as real shopping, and a whole lot cheaper. Research shows that most of the pleasure in shopping lies in anticipation – not the actual purchase.
3. Focus on buying items that will add real value to your life and pay off the amount owing on your credit cards in full every month. Also, never use your budget facility if you can help it.
4. Get smart about finding bargains. Again, focus on what will really add value to your life. Sometimes one or two classic, quality items that you wear for years are a better bet than lots of cheaper, disposable fashion.
5. Pay your rent on time, in full.
6. Do not damage your landlord’s property – and if an accident happens, ensure that the damage is rectified or it will reflect on our database.
7. Put away enough savings to cover your living expenses for six months should you lose your job.
8. Invest in a savings product like a retirement annuity. This will force you to put money aside for savings, even when you’re tempted.
9. Never buy non-essentials like holidays on credit. Rather save up and pay cash.
10. Pay off big purchases like a car over a shorter rather than a longer period. The longer you take to pay something off, the more it will cost you in the long run.
- Fin24
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