A New Year’s resolution is a tradition most people do for self improvement, one of the healthy resolutions that people need is financial expansion.
Saving money is part of a healthy lifestyle and can benefit a lot of people. According to Mogomotsi France, a Financial Advisor from Key I Solutions, one needs to understand that money and emotions are linked, as the way you manage money is determined by how your ideas perceive money.
He says most people were told that money is evil, and this deprived them of an opportunity to learn and appreciate how to successfully manage it to acquire their assets, but rather rely on the mindset, which clearly had little to offer. Adults now find themselves with little financial knowledge and make a lot of mistakes which in turn, drive them more into debt.
France says that a commonest mistake people make is that when one’s salary is increased one changes where one shops, drinks and wears. They seem to associate certain shops with prosperity, without understanding the psychology of spending.
“Psychologists have found that there are several forces that govern our consumer behaviour and cause us to make decisions that are not necessarily rational or in our best interest. However, understanding why we buy what we buy can help us make better decisions in the future,” said France.
He said a common mistake a lot of people make is when they go to an ATM with an intention of cashing P150, and upon withdrawal, they cash more than that, without realising the impact of that extra cashed amount and this money is usually spent on what you eat, drink, wear and airtime. France further explains that at the end of the month people buy grocery and at work they buy breakfast and lunch.
This means that if you buy a P300 grocery you are using another P300 at work, which means you are spending P600 on food only. He says “We need a different kind of mindset as one can work for 30 years without realising the mistakes one continuously makes.”
He advises that for people to change their mindsets they need to know the following;
• `You are what your society has made you believe up until you realise that you are responsible for who you become.
• You are who you are where you are because of what has gone into your mind, and you can change who you are and where you are by changing what goes into you mind.
• Money management is the process of knowing where you are spending your money today and having a well-thought-out plan in place for where you want it to go in the future.
• Seek a financial advisor not a salesperson to assist in financial planning.