Here are 5 things you should and shouldn’t do with your cash if you want to be one of those rich people you love to hate.

1. The cappuccino effect

 I know the poor cappuccino gets a lot of flak but when you add the cost of this to a designer sarmie or muffin every day, you are looking at R60 per day, R300 per week, R1 200 per month and a staggering R14 400 per year on coffee grounds and flour. What can you buy with R14K? A retirement plan, a vacation, a good chunk of your kid’s school fees and 288 pairs of underpants if that’s your thing. This applies to everything we routinely waste money on.

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2.  Are you a wimpy negotiator?

We will happily spend 10 minutes haggling over copy jeans in a flea market but when it comes to the big ticket items, we meekly accept the asking price. Everything is negotiable, interest rates, cars, furniture electronics, property, everything!  If you routinely negotiated on everything you bought you could save many thousands a year.

3. Accepting the status quo

Deep down you know that your expenses are too high and there are many things that you could ditch without missing them too much. Do you really need an expensive cell contract and a new phone every 2 years? Do you really need 150 TV channels? “I will fall over dead if I don’t subscribe to cable TV ” said no one ever.

4. Holding onto high interest debt.

All those credit cards, retail accounts and unsecured personal loans are costing you your holiday home on the beach. Get them under control. A home loan interest rate is around 10,5%, retail debt can be as much as 26%. It takes a little bit of sacrifice in the beginning to free up some cash in your budget to pay these babies off but giving up on a few tequila shots and eating your mama’s budget mac and cheese dish, is well worth the effort.

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4. Retirement savings

No it’s not a typo. The notion of retirement is as out dated as bell bottoms. Here is the good news we are living a lot longer, in fact according to longevity experts, kids born after the year 2000 have a 50% chance of living until they are 130. Imagine working for 65 years and having to find the cash to fund another 65 years of gin and tonics, it’s not going to happen. So we need to save, not so we can sit on our rears and watch the world pass us by but to enjoy life and let the other rats run the race.

5. Paying OTT for a Vacation

If you go slightly out of season you will save as much as 50% on your trip. Ok you so you are a snob, you want the choccie on the pillow, the sea view, and the end of the toilet roll folded like an exotic bird. Really? If you go really high end you can pay anywhere from R1000 per person to the sky’s the limit. You don’t go on vacation to stay in your hotel room, that’s just silly. If you want pictures for a Facebook brag go and visit a six star, order cocktails and take pics on the balcony. The money you save on budget accommodation could pay for the rest of your holiday.

6. Saving savings and asset protection ‘til last or not at all.

If someone was handing out free money you would not stand back and let the other people get in front of you. No, you would be pushing, shoving and pulling hair like the rest of them. Ironically we do this very thing when we prioritise bills and shopping over investing and protecting ourselves. If we don’t prioritise saving and getting our long and short term insurance sorted, it never gets done.

By addressing all the issues listed above your financial picture will look very different one year from now, it’s up to you to change it.

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