Seven Money Rules We Never Break
To be a successful player in the money game, there are rules you should never break.
- Never borrow/lend money from family and friends
The fastest way to end a relationship is to borrow money to friends and family. Here are a few things that you need to keep in mind
- You are their last resort. They most likely have a terrible credit record and do not qualify for credit and cannot repay the loan.
- You are enabling their bad spending habits. Unless it is a true unforeseen emergency, do not do it.
- Be prepared to never get your money back.
- What if you need the money for an emergency?
- It is uncomfortable consistently asking for your own money back. Are you prepared for this?
- Don’t go shopping on an empty stomach
My gran always said: “Don’t do your grocery shopping when hungry or angry.” The shareholders of Pick n Pay will be smiling all the way to the bank as you pile your trolley with all sorts of goodies you don’t really need. A rush of blood to the stomach or heart will reduce the normal blood supply to your head. This forces your blood-starved brain to make short-sighted decisions. Eat first if you’re hungry. Cool down first before walking into your favourite shop.
- Never let emotions get to you
We work very hard for the money we make, so it makes sense that we become emotionally attached to it. The problem with emotions is that they could get it in the way of the decisions that you make, especially when it comes to investments. Removing emotions from money is something that takes time to learn but a skill one needs to learn to allow money to grow.
Peer pressure and other forces sometimes connive to propel us to spend more than we earn. It is in your best interest to defer that purchase and keep the debit or credit card firmly packed away in your purse or wallet of you don’t the cash right now. Money savvy people don’t spend more than they earn.
- Don’t go broke trying to get rich
We don’t apply for loans to invest into crypto or forex schemes. Sun City was not built in a day. Bogus schemes are one way to get broke trying to get rich. Desperation is what makes us fall into “make 100% of your investment in 3 days”.
Always remember that nothing worth having comes easy, especially when it comes to money. Wealth takes time to accumulate, so don’t think you are special and there’s a shortcut to getting loaded. Take the time to learn to keep, make and grow your money. The journey is far more fulfilling.
- Invest 10% of any money you make
You will often hear people say, “Pay yourself first”. What does this mean? It means every time you earn income, a portion of it is used to buy your time back in the future. We use money to buy time and freedom. This rule is easy to apply from your very first pay-check, however if you are used to spending everything you make, you need to make some lifestyle changes. It is not easy, but it can be done.
If you cannot decrease your expenses, your best bet is to increase your income with side hustles.
- Do not spend money you have not received yet
You’ve scored a nice gig that will pay you R20 000 for three hours’ work promoting top end suits at a top Sandton hotel. That money has not come through yet. This is the time when patience pays. Don’t use your overdraft or max your credit card with the hope that you’ll replace that with payment from your client. The future is never guaranteed…wars break out, pandemics start etc. Wait until you get a notification from your bank before you tap you consider spending.
- Never tap into your retirement savings
You don’t break into your retirement savings to take care of your day-to-day needs. If you change jobs or are retrenched, save your provident or pension fund in a preservation fund and not use it for immediate needs. Using retirement funds is like stealing from your future self.
To win in this money game, we need to make, keep, and grow our money.