As the festive season draws near we often get carried away in the holiday spirit where we end up spending more than we should. We then find ourselves in January broke and miserable in a blink of an eye.
We need to be mindful of how we spend our money. Oftentimes, we try to keep up with social media and celebrities to try and spend beyond our means. Peer pressure does not only affect teenagers; as individuals we all have an innate urge to evaluate our progress against those around us.
For example, parents often want the best for their children, often going beyond their means to make this happen. Sending your child to one of the best public schools in the country can set you back per year, and to top it up with social media pressure and your surroundings can add pressures which can be detrimental to your finances.
Trying to keep up with social media pressure or your surroundings can land you into deep financial difficulties.
According to Ayanda Ndimande, Business Development Manager of Retail Credit at Sanlam says, “as parents, we are always on the lookout for the best ways, tools, and resources to raise our children. For first-time parents, this may mean feeling that you need to have the most expensive pram, the latest toys, must-have gadgets and clothes, only for the child to outgrow them in a few months. By reorienting that desire toward your child’s long-term prospects, you can help build a strong financial foundation that your children can use as a launchpad for their lives.”
Below are the three tips which Ayanda recommends that will help you give your children great opportunities without compromising your financial well being.
Build a Healthy Relationship With Your Credit Score:
If you’ve ever taken out a loan, registered a bond, applied for a credit card or even a cell phone contract, you’ll most likely have a credit score. Your score tells prospective lenders how much of a ‘risk’ you are in terms of your past debt repayment behaviour. It looks at your transactional records and gives you a score, ranking you as low, medium, or high risk. Your credit score is a living number that fluctuates depending on your debt repayment behaviour. The pressure to keep up appearances can often lead people to take out loans or dip into their credit. Not all debt is bad but going into debt should be carefully considered and geared toward useful long-term benefits.
Ayanda says, “Whilst trying to do the best for our kids, it helps to also have a longer-term view. Think about the financial position you want to be in in the future. Knowing your credit score will help you do this.”
Talk to Your Kids About Money:
When we try to keep up with our peers, friends or colleagues we often end up spending without thinking and going deeper into unplanned debt. Your children learn life-long financial habits – both good and bad – by watching the way you manage your money. By speaking to your children about money, helping them track their spending and open savings accounts, you can equip them with the tools to be able to buy their toys and be more considerate when they do.
Remember That Social Media isn’t Real Life:
While it is entertaining, remember that social media is often a sanitised and curated view of people’s lives. Through the power of angles and filters, it is very easy to make things seem grander than they are. We often know little about people’s finances when we look at their posts. It is also important to be kind to yourself, we all have different goals and will take different financial paths to reach them.
Ayanda strongly advises individuals on unnecessary expenses which could easily be avoided by not trying to keep up with social media which could sometimes take a toll on your mental health or well-being.
“not owning the latest gadget or sending your child to a school that costs a quarter of a million rand a year is not a reflection of your success. We all have different lives and needs and comparing ourselves to others can negatively affect our mental health. Shift your focus towards long-term goals and put the necessary plans in place to make them a reality.”
