The Realities of Debt and how to Redefine Your Relationship with Money

We all have a complicated relationship with money. Many of us don’t realise that our spending habits were ingrained in us from childhood. Growing up, we were exposed to the ideals of a luxurious life by the media we consumed. We watched lifestyles of the rich and famous with envy, our desperate attempt at being “cool” has tied our value to expensive material possessions and we have become accustomed to the idea that social status is far more important than financial security.

My mother has worked in banking since she left school. She taught us about the importance of saving money and we had our own bank accounts from when we were kids, but even under her sage guidance I still managed to fall prey to the trappings of a lavish existence. Working as a freelancer often means huge paydays in some months and no income in others. Yet somehow, when there are enough zeros at the end of a transaction, a sense of euphoria numbs the reality of more difficult times.

I am currently on a journey of erasing my debt for good and this process entails analyzing the root of my spending habits, detaching my self-esteem from my financial status and asking myself some very difficult questions.

My learning process for any subject begins with the gratuitous consumption of TED talks and podcasts. Most recently I have focused the subject matter around business, money and psychology. Throughout the course of this feature, I will share the questions I have asked myself – to determine what I need the most help with.

Critical questions to ask yourself:

Does money control the way I feel about myself?

When did money start making me feel important?

What are my best qualities regardless of the influence of money?

Where do I spend money unnecessarily and what motivates me to buy these things?

Why do I want people to think I have a lot of disposable income?

Considering your answers to these questions carefully will help you understand your relationship with money and give you perspective on how to redefine your spending habits. If you are in debt from unnecessary spending, you need to address that immediately.

We also need to address the very real culture of shaming people for their debt. This occurs on many levels and causes people to hide their struggles. If you are unable to speak about your problems you will never ask for help, and your debt will continue to cripple you. There are three important TED talks about shame and money issues that I have watched recently. Here, Brene Brown speaks about the psychology of shame and confronting these feelings and Tammy Lally gets you to understand the realities of your money problems on her TED talk.

You’re probably wondering where you should start making changes, perhaps you’ve justified your spending as necessary because you haven’t assessed all the expenses in your life. Research shows that South African Household Debt is astoundingly high, 71.9% of the average gross income in South Africa goes towards debt.

These are a few things I’m focussing on in order to curb my expenses:
Set a realistic monthly budget based on your lowest expected income for the month.
Buy bulk groceries instead of shopping every day.
Cook at home instead of ordering delivery or going out to dinner every night.
Grind your coffee beans at home and skip that take-away fix.
Check your insurance policies, medical aid and debit orders to make sure you’re getting the best deals.
Cancel subscriptions you don’t use often enough to justify the expense.
Close any store credit accounts that you have so that you can pay them off without incurring further debt by the temptation of buying on credit.

Small changes in the way your money leaves your pocket will make a significant change in your bank balance, and if you currently swimming in debt, can apply for debt counselling. Debt counselling helps you make your repayments more manageable and also helps ease the stress of being hounded by debt collectors. Online resources like DebtFree can assist you with the information you need.

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