Author: Gugu Sidaki

Gary Chapman wrote an international bestseller in 1992 titled The Five Love Languages: How to Express Heartfelt Commitment to Your Mate. He writes about the five ways to express and experience love between romantic partners which he calls “love languages.” They are gift giving, quality time, words of affirmation, acts of service and physical touch. Over the years, there have been a few variations of this book and the most interesting one I’ve found is the personal finance spin.  Tarra Jackson from The Patch wrote the following in her 2014 article:

Financial Love languages are identified by behaviors that represent individual financial value systems.  By understanding these behaviors, couples can improve communication and establish a collective financial value system. The four Financial Love Languages are Saving, Giving, Investing and Spending.

• Saving is not only an action of financial security, but for some it is an act of fear or control.
• Givers have a philanthropist heart.
• The Investor takes relative risks and enjoys watching their money grow
• Spending deals directly with the “Pleasure Principle.”

I recently came across a very interesting blog post in Mint life regarding love languages and how they affect your finances. The flow chart they created will help you discover your love language and they provide tips on how to use that to craft a better relationship with money. It may help you as well, as we wrap up the month of love.

Rest…you’ve earned it!

Plan. Plan. Plan! We’ve had a few posts about this, and it may seem repetitive, but the truth is that planning is what we’re not doing much of when it comes to our finances. That’s how we end up overspending and having more month at the end of our money. This is particularly amplified over the holiday season.

If you want to have a less stressful holiday, get your budget ready now. Plan for every cent now. Don’t get caught off guard with all the ‘low deals’ and ‘never-to-be-repeated-again’ specials. It’s all a gimmick to make you part with your money.

The next most important task, after budgeting, is sticking to the plan. Stay the course. Don’t get distracted, no matter how tempting it is. You’ll thank yourself in a few weeks’ time when the hype dies down and reality seeps in.

A few tips to help you along the way:

• Plan meals in advance and stick to your shopping list. You spend more on groceries if you shop without a list.
• Try not to drink alcohol at a restaurant these holidays because, as you know, it costs more than it should.
• If you’re one of the lucky few to get a bonus in December, consider preserving it – all of it just for one month. Once the festivities have dissipated, revisit how you’d like to spend that money and your decisions may be a lot more sensible then.

The holiday season is meant to be a time of joy and celebration and it is also fraught with deals and specials that you simply cannot do without. It is also, unfortunately, when scammers are also hard at work to have you part with your hard-earned money.  You must always be vigilant, but particularly during the holiday season, and be able to recognize when a deal is actually a scam.

Cyber security

This extract from Symantec, a global tech leader in cyber security software, summarizes what internet scams are:

´Internet scams are different methodologies of fraud, facilitated by cybercriminals on the Internet.  Scams can happen in a myriad of ways- via phishing emails, social media, SMS messages on your mobile phone, fake tech support phone calls, scareware and more. The main purpose of these types of scams can range from credit card theft, capturing user login and password credentials and even identity theft´.

Cyber security threats increase markedly during the holidays and you must keep your wits about you. Here are a few tips from CSO, another industry leader in cyber security, that may help you:

• Check contact names: Use caution if you receive communications from a source you don’t recognize that asks you to take an action, like providing personal information or signing into a site. Most, if not all, companies will never prompt you for your information via email or text. When someone does, this should be considered a red flag that they’re not who they say they are. Check their email address or phone number and compare it with the person or organization they claim to be associated with for inconsistencies.
• Look for misspellings and poor grammar: Professional organizations take the time to read their communications over before sending. Oftentimes, phishing cybercriminals do not. If you receive a message from a supposedly trusted source that includes typos, poor grammar, or bad punctuation, chances are it’s a scam.
• Look for aggressive behaviour: If the subject matter and language of a message is overly aggressive, it is likely a scam. Have you ever seen an email in your SPAM folder saying something similar to, “Urgent! Your account is X days overdrawn Contact us IMMEDIATELY”? The goal here is to make you uneasy, panic, and take the action the scammers want. Instead, check with the party they claim to represent before taking any immediate action.
• Avoid “free” deals: As the old adage goes, “If it sounds too good to be true, chances are it is.” Many cyber scammers will attempt to lure victims in with promises of free downloads, free shipping, free subscriptions, etc. So, be sure to not only double check the source and read the fine print of any agreements, but also do some checking on the organization claiming to make these offers.
• Use secure WiFi: Be mindful of free WiFi. Public spaces and shops offering free WiFi connections are common locations for man-in-the-middle attacks where criminals will often broadcast the availability of WiFi services and then use them to capture data. When using public WiFi, use VPN connections and avoid sensitive transactions. Many mobile apps are also programmed to automatically connect to known connections, so cybercriminals often use common WiFi SSIDs, such as “Home Network” to trick devices into automatically connecting without requiring any user input.

The year is almost done and feels like it flew by. There are four full weeks left before December and the festive season begins two weeks after that. Many companies in South Africa pay December salaries on the 15^th to allow people to make travel arrangements and to do some last-minute holiday shopping. The issue with this is that most people are usually out of funds by the first week or two of January making that month feel like years!

It all comes down to poor planning and we do this year-in and year-out. We know the holidays are coming and we know what is required of us during that time, yet we still manage to overspend.  The reality is that it is a happy time for most people and spending money is a part of it. However, it doesn’t have to ruin you financially. In fact, it is quite possible to still have a good time on a budget, if you are willing to give it a shot.

Here is the first tip from us:

Try to use cash, whenever it is safe and possible to do so.

A research paper revealed that cash payments have the same effect on the brain as physical pain. In other words, our brains register parting with money in the same way that it processes physical pain – it’s unpleasant. In this paper, ‘Monopoly Money: The effect of payment coupling and form on spending behaviour’ by Raghubir, P and  Srivastava, J, it was found that using a credit card was less ‘painful’ because of the delay between the transaction and the settlement of the bill. Paying with a credit card is also less ‘painful’ because you can aggregate your purchases, making it feel better to spend more.

In a few other studies, it was revealed that consumers were willing to spend more even for the same products, if they were swiping a card instead of paying for it in cash.

The moral of the story? If you are trying to control your spending this festive season or any other season, consider using cash instead of swiping your plastic.

Modern day living is not only very complex but expensive too. Given the current state of the economy, it is important to pause and regroup every now and then in order to manage. I mentioned in a previous post that the tiny house movement has gained momentum in the past few years and one of the reasons for this momentum is the realization that we don’t need a lot in order to live well. In fact, we need very little. Whatever we accumulate over and above our needs is optional and often comes at a great cost.

I often meet individuals who believe that it is impossible to live a good life below a certain income bracket which is then exacerbated by our fledgling economy. Through experience and a lot of research, I can confirm that this is not entirely true.

I have a friend who cleared her wardrobe of all items except for a few – if I recall correctly, she kept eight or so items. Her reasoning was that she wore those items most of the time. The rest were in her wardrobe for months on end without ever being worn. When I took stock of my wardrobe, I found the same to be true. In fact, I have a few items with tags on them and it’s very possible that I may never wear them. The same is true of the items in the fridge, the pantry and the rest of our home. Often, we buy and store things out of the need to buy things. Not because we need them.

Whenever we go through the budgeting exercise with clients, we uncover such wastage. The trick is then to convince clients to declutter and keep things that way. Being a minimalist and living simply is often the answer to many people’s financial woes, not the lack of money. I stumbled on a blog dedicated to the art of minimalism and some of their ideas would make many people uncomfortable. The outcomes of their minimalist tips include the following:

1. Lower expenses (and more savings)
2. Less stress
3. The house is easier to clean
4. Less consumption is good for the earth
5. Productivity goes up
6. Money can be spent supporting good causes
7. Minimalists are happier

Purging your home, and life, of stuff can really be beneficial to your finances and wellbeing in general…if you dare.

One of my favourite things to do is spending time at the bookstore not far from where I live. The eastern philosophy section is my favourite part of the store and I can easily spend hours browsing through the books on display. The most recent and truly fascinating find is ‘ZEN – The art of simple living’ by Shunmyo Masuno, a monk and head priest of a 450-year-old Zen Buddhist temple in Japan.

In this book, Masuno gives 100 lessons segmented into four parts. The following are some are worth sharing here:

• Lesson 62 – Cast away the three poisons

If we can cast away these three poisons (greed, anger, ignorance), we can live happily and freely

• Lesson 94 – Free yourself from money

Instead of chasing money, you need to figure out how to contribute to society. You must work out how to be useful in the world. Once you act on this, you’ll find that the money you need will ultimately find you.

These lessons coincide with some of the lessons we teach at Wealth Creed’s financial literacy programmes. We often tell attendants that a lack of knowledge in this era of information and technology is their doing, to a large extent. Before committing your money to anything, do your homework. Research. Ask. Find out if it’s a good idea or not.

We also teach that the amount of money you possess is secondary. It’s what you do with it that makes all the difference. So often, people chase a ‘number’ without possessing the knowledge, discipline and patience to look after that money. All of which amounts to naught. Learning to live within your means is the greatest liberator and something that we should all strive for.

Being a self-employed parent in this fast-paced world we live in means I often find myself fatigued and in need of an energy boost. Reading self-help books such as this one is a great help and I’d recommend it to you too.
It is enlightening with very practical guides and some philosophical lessons too to help you manage some of life’s challenges.