If you're lying awake at night, trying to figure out how you are going to pay all your bills this month and still have money for petrol and food, you need to read this. Insomnia and stress, caused by financial woes, are often the cause of other health-related problems.
Unless you are in good health, you will also find it impossible to hold down a full-time job, in which case your finances could also be a bit tricky. So looking after both health and finances should be priorities in anyone's life.
Everyone is feeling a bit financially sensitive at the moment, to put it mildly. The cost of living is increasing at the speed of sound, but salaries are not. No wonder that in a recent poll on News24 (July 2012) 51% of users said their biggest nightmares were caused by financial terrors.
The rest of this site concerns your physical health, so this one article will deal with financial health. What are some of the most basic things you can do to become more healthy financially?
- Open your own account and check your statements regularly. Don't do the ostrich head-in-the-sand thing - it will just make matters worse. If there's a problem, it's always better to sort it out early.
- Use a cash or a debit card rather than cheques, because cards are simply cheaper. Cheques have actually gone out of fashion and not just because they're expensive, they are also dangerous if they land in the wrong hands. Find out if your bank offers special deals that give you a number of monthly transactions at a fixed amount. Or even better, use the internet to make payments. It's quick and cheap. But just watch out for people trying to scam you into giving them your password details. Set a low transaction limit on your account.
- Work according to a budget, rather than simply spending until the money is finished. This might seem infantile, but ask around, and see how many people don't budget at all. That's how one ends up being broke for the last two weeks of every month.
- Once you start borrowing money to pay other debt, the alarm bells should ring. Especially if you're juggling credit cards on which you pay a lot of interest. You need to reduce your expenses or increase your income to get out of this one. Try and make do with what you have, and don't go shopping to lift your spirits. It won't help.
- Try never to buy household goods on credit – once you start paying interest on things such as food purchases, you are going into a downward spiral.
- Buy things such electricity, airtime for the cellphone and the Telkom line on prepaid vouchers. In this way you have more control over how much you spend on these things. If there's a real crisis, you can always go and buy another voucher.
- Give children a fixed amount of pocket money, rather than having them constantly nag you to buy things for them. Children can be very persuasive and manipulative. And bang goes your budget.
- Minimise the number of accounts you have. The temptation is always there to spend money you don’t have, for which you pay dearly later on. Buy now, suffer later.
- Have an emergency fund, equal to at least one month’s full salary. It is expensive to do things like plumbing repairs or buying a new tyre on your overdraft. And a crisis always has a way of happening three days before payday. I know this is enormously difficult as most people simply live from pay cheque to pay cheque, but a bit of a cash reserve will give you endless peace of mind.
- Learn to tell people you are broke when you are. Many people have found themselves going into debt in order to join friends in expensive activities they simply cannot afford. If you do this a couple of times a year on special occasions, no problem, but every week, no. Going out is expensive - home entertainment really does cost a lot less. Invite friends to your place and get everyone to bring something. It's much cheaper than going out.
- When people ask you what you want for your birthday or Christmas, have a list of things you really need. It is much better to receive new underwear, a toaster, or a towel than yet another green vase for your garage collection.
- Buy basic groceries in bulk once a month rather than impulse buying at smaller more expensive shops - especially the 24-hour shops. You really are paying a lot for the convenience.
- When you find something that is really a nice and inexpensive gift, buy a few for future use if you can afford it. And while you're about it, don't buy someone a gift you would really like for yourself, as you end up keeping it and having to buy them something else.
- Try to pay a little more than the bare minimum on outstanding accounts. This will decrease the interest that you pay. If you're ahead on your accounts, it also is a way of saving for Christmas expenses - you might be able to skip a whole payment by then.
- Learn to distinguish between the things that you want and the things you really need. This is a difficult one. Really difficult.
- Make sure you have adequate medical scheme coverage. Nothing can deplete your finances so completely as a sudden and serious illness. A hospital plan will usually do it, especially if you're still young and healthy.
- There is nothing wrong with buying secondhand appliances or cars – it will cost you a small amount to have them checked out by an expert and you can save thousands. Much better than paying a huge amount of interest while paying something off over months and months.
- If you are unable to meet your debt repayments, speak to your creditors – don’t just keep quiet, as this will be interpreted as an unwillingness to pay. Make arrangements to pay off a certain minimum amount – if these payments are made regularly, no action may be taken against you and you will keep your credit record clean.
- Taking a good multivitamin regularly could prevent expensive visits to the doctor. Or you could just make sure you get your 5 fruit and veg a day.
- At least once a month, go out for a pizza and/or a movie – you work hard for your money and should have some enjoyment from it other than paying the bond, and filling the car with petrol.
(Susan Erasmus, Health24, updated October 2012)