We’ve worked with countless clients who earn plenty of money and still struggle with debt. But how can this be? 

When most of us look at other people, we make a judgement call on their wealth. We all do it. And the quickest perceivable solution is often: I just need to earn a little more each month.

It’s easy to think that everyone else has it figured out and is ‘earning enough money’, and we’re the only ones struggling with debt, but we’re not. 

The problem is not that we don’t earn enough; it’s that we haven’t been taught which habits keep us in the wealthspace, and which habits keep us in debt.

Wealth is as much about adopting better habits as it is about income.

Essentially, good money habits boil down to three simplified points. 

  • Spend less than you earn and invest the difference. 
  • Pay off your credit cards in full each month. 
  • Don’t buy things you don’t need. 

With increasing fuel and food costs and the rand in a state of flux, there may be a temptation to leverage debt by making day-to-day purchases on credit, but it’s at times like these when minimising our debt should be our priority.

Habits form the very first time we decide to do something, whether it’s charging to our credit card or deciding to stay in rather than dine out. We need to break bad habits that get in the way of financial stability and establish new, healthy money habits. 

Here are five healthy money habits to implement right now to start a better debt-free life:

  1. Check in with your financial adviser regularly. We all have blind spots when it comes to working with money. Apart from the experience and qualifications our team has under their collective belts, the biggest value we provide is in helping you see your blindspots. When you can observe bad habits, you can change them.

  2. Avoid accumulating more debt: pay for your purchases with a debit card or cash, rather than a credit card. Discipline is key.

  3. If you receive an annual bonus or any other unexpected windfall, contribute part of this towards reducing your home loan or car finance, as this will reduce the amount of interest you pay overall on these longer term loans.

  4. Set aside a portion of your bonus for investment over the long term, like a tax-deductible retirement annuity or an endowment fund. Also make sure you consider the various tax-free savings options that offer you your full investment return without being taxed on any of the growth you have earned.

  5. List your unavoidable financial commitments: school fees, medical bills, inflation-adjusted insurance premiums, car services – and ensure you set aside enough to handle those expenses without financial anxiety.

Cultivating good habits is easier said than done. It’s not easy to implement change, but if we’re unwilling to do anything different, we cannot expect to see a different outcome. We’re here to help you thrive; let us know how we can help you today.