Windhoek – November and December are bonus months at many companies and the 13th cheque is much anticipated by most people. Some might want to pay off a debt, others can now book that dream holiday while some decide to save the extra money for a rainy day.
Tracy Eagles, Chief Marketing Officer at FNB Namibia, says that the bonus could and should be used by those people that are over-indebted and do not know how to get out of the financial trap. “We have all made bad financial decisions but the key is recognising when you are heading into real trouble and need to make a U-turn, which means changing your behaviour.”
“Allow me a short word of advice to those who are lucky enough not to have any debt and do not really need to spend their bonus. Why not save the bonus in one of the numerous notice accounts that FNB Namibia offers instead of spending it on unnecessary luxuries? There always comes a time when one needs a bit of extra cash – either for a car service; or medicines when the medical aid fund is depleted or that extra stationery for the school children. FNB offers a variety of accounts such as 32-day interest plus, 7-day notice and 32-day flexi notice – to name but a few.”
About indebtedness, Tracy advises that if people are taking on debt just to cover their everyday expenses they are never on top of their finances or if they are generally panicked when thinking about money, then it is time to take control and make a financial U-turn. She gives a few tips to identify and make a real change that will make a big difference to customers’ financial well-being.
Have a meeting with yourself
“This may sound silly but you are the most important factor in this relationship,” says Tracy. “You are the one responsible for the money that comes into your bank account and goes out of it again. And if you are in financial difficulty, you are the one who will gain the most from getting yourself on top of your finances.”
Tracy suggests having an honest conversation with yourself about your money and what you are spending on. “Take all your statements for the past three months and analyse your income and expenses. This may take a while if you have never been through this exercise and the results may also come as a shock to you once you realise how much of your money is spent just on debt or unnecessary items that are not used. Once you have an idea where your money is going, you will be able to take the first steps to taking control and changing your spending behaviour,” says Tracy.
Building a real plan
Decide on an action plan, which will address every one of the payments you make out of your account. You will need a time frame and an amount to put towards your goal every month until it is achieved. For example, if you have N$10 000 owed on your store card with an interest rate of 20% and you decide you want to pay it off in six months, you will need to allocate N$1 765 per month to pay this off.
“The biggest trick is that you will not only have to really tighten your belt to ensure that you reach your goal in six months, but you will also have to change the behaviour that got you into the difficulty,” says Tracy. To make things easier on yourself, set up some rules to address certain patterns that cause you to break your habit, such as spending your Saturday mornings at a mall. Change this completely so that you aren’t tempted, by spending your Saturday mornings doing something else.
Give yourself a break
If you set yourself up with overly strict rules, you are setting yourself up for failure.
“You need to be reasonable,” advises Tracy. “Will you completely refrain from going out with your friends or buy nothing new for the next year? It is unlikely, so build this into your plan and allow yourself a treat every now and then so you don’t become disheartened.”
Stick with it
“You need to know that this isn’t just for now, or the next few months. Responsibility with your money is something that needs to happen for the rest of your life,” says Tracy. “This means not giving up the first time you slip by purchasing something unnecessary or missing a repayment on your loan. Making real changes to behaviour is very difficult. Habits are easy to fall into, that is why it is called ‘breaking’ a habit.”
“Making the decision to change is usually the most difficult part of changing bad financial behaviour. Once you have made a U-turn you will be well on your way to gaining control of your finances, and your future financial well-being,” says Tracy.