Being unemployed was definitely not a part of my plan but there was no way we could miss the amazing opportunity of living in Europe for 2 years and maybe a lot more. My husband and I decided on a certain amount of money that I would receive as a monthly allowance to spend on whatever I wanted to. The issue with that was the fact that I had debts when I left my job. I had a loan as well as a credit card and I support my mum financially. I made it work and still had enough to buy things I wanted. In the beginning, I was on a buying spree, I spent a lot of money every month buying junk that I probably didn’t need. I was buying so much because there are a lot of differences between products available in South Africa compared to Europe.
Over time, not much changed. I was still spending money on a lot of stuff that I didn’t need but what I did start noticing was that the house was starting to fill up with all of these unnecessary items that had no place. At one point, I also received a tax refund which was also spent (the majority in Sephora and Primark on makeup that has hardly been used) and the rest on books (which have not yet been read). With all of that said, these are the top lessons I have learnt about money:
- Available funds in your credit card is not the same as having money that you can spend. When I got my credit card, I used it as extra money that I could spend on everything that my heart desired. Now, I am aware that just because I have money available in my credit card, it does not mean that I can spend it buying useless items to fill my home. I have gotten into the habit of questioning every single purchase I plan to make with my credit card before actually making the purchase.
- If you can’t buy it with cash, don’t buy it. This is one lesson that my husband has taught me. Whenever we have made big purchases, it has always been done with cash. (I am not referring to vehicles and houses and other assets in that range). What I am referring to is the smaller items, laptops, phones, tablets, and other electronics.
- Have an emergency fund. I cannot begin to tell you all of the times I have had to go into debt in order to resolve emergency situations that cost me a whole lot of money. I now realise that I need to have an emergency fund built up over a period of time in order to prevent unnecessary financial stress in the future.
- Don’t spend money if you know you can’t afford it. I have spent large sums of money to try and fit in with people and then ended up drowning in debt. I am always assessing whether something is affordable and what the financial implications in the future look like (finally using my degree to improve my personal finances). I am now open when it comes to why I can or cannot participate in certain things. There is nothing shameful in not being able to afford something that others can. For me, my education, a home and a reliable vehicle will take precedence over any entertainment.
- Learn to live below your means. This is linked to point number 4. A lot of us end up buying things that we simply cannot afford instead of just buying the things we need. If you only buy the things you need, you will have more money to invest. Instead of instant gratification, we should learn to delay gratification in exchange for a larger reward.
I will have to see how best to implement this new knowledge into my life once I am earning my own income again. What is the best financial advice you have received or learnt? I would love to hear from you in the comments below!
-The Uninspired Blogger