Savings

While listening to radio, the host wanted to know where the word “cheapskate” comes from and asked if his callers consider themselves “cheapskate”. As listeners called in, a lady called in and said her boyfriend is worth R18 million but is so stingy/frugal that he buy his clothes from a cheaper store. This kept me thinking of how we view money.

Many marketers work overtime to confuse us about money. They take our misunderstanding of the time value of money, or our aversion to reading the fine print, of our childish need for instant gratification and most of all, our conflicted emotional connection to money.

Confusing customers about money can be quite profitable if that’s the sort of work you are willing to do.

A few things to keep in mind:

1. All entrepreneurs must spend wisely. They must not get caught up in the hype and buy expensive items just to look the part.

2. If you borrow money to make money, you have done something magical. On the other hand, if you go into debt to pay your expenses or buy something you want but don’t need, you have done something stupid and short-sightedness and ultimately life-changing for the worse.

3. To go along with #2: Getting out of debt as fast as you possibly can is the smartest thing you can do with your money. 

4. Under no circumstances should money be used to impress or spite other people, that only lead to debt and stress. Find other means to impress.

5. If money is an emotional issue for you, you have just put your finger on a big part of the problem. No one who is good at building houses has an emotional problem with hammers. Place your emotional problems where they belong, and focus on seeing as a tool. If you can’t control your emotions, you can’t control your money.

6. Saving money is not for the faint hearted, it is difficult. It requires courage, sacrifice, dedication and commitment. But it can be done.

7. Credit cards are weapons of mass destruction. They have made millions indebted and stressed. They have contributed to divorces. Buy in cash.

8. Like many important, professional endeavours, money has its own vocabulary. It wont take you too long to learn what opportunity cost, investment, debt, leverage, basis points and sunk costs mean, but it will be worth your time.

9. No one will make you save money but you. You have the power within you not to be misled by mass media that usually tell you to spend.

10. The greatest feeling ever is to delay instant gratification, to wait and save money and then spend it by buying something in cash.

11. The most difficult thing you can do is to save money while people around you spend it. Successful people do difficult things.

12. It is recommended that people should have an emergency fund that totals 6x their monthly expenses for unforeseen expenses.

13. If you have a job, a steady day job, now is the time to figure out a way to earn extra income in your spare time. Freelancing, building a side business, that R2000 every month for the next twenty years can create a peace of mind

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