Ten timeless money tips

Live within your means

This isn’t necessarily the same as spending less than you earn. There may be circumstances such as paying for tertiary education or buying a car to secure a job when you must spend money to increase/secure your future earning potential. How you employ surplus money determines your future wealth. For instance, housing surplus cash in a savings account rather than investing in the markets does little to create sustainable wealth.

Actively monitor spending

Make a habit of record-keeping, checking bank balances, double-checking debit orders and querying fees. Be ruthless with budgeting. Look for the best interest rates, interrogate your cellphone contract and read the fine print. Know your consumer protection rights, especially regarding financial contracts.

Pay your bills early

Also, try to pay more than the minimum amount required. This helps reduce the capital amount owing sooner and the interest you pay over time.

Read voraciously

With the broad selection of online publications, books and blogs on financial planning, there’s no excuse not to educate yourself, constantly. Moneyweb publishes regular articles on various financial-planning topics. Authors like Bruce Cameron, Robert Kiyosaki, Jean Chatsky, David Bach and Kirstin Wong have published excellent financial planning books. Try to read at least one financial-planning article daily and one personal financial planning book a year.

Say ‘no’

It’s good to deny your children their wants sometimes. Until they’ve traded a day’s work for a salary, it’s unlikely they’ll fully understand the value of money. In a world where they can have anything, it’s your job to help them realise they can’t have everything. Children must also learn kindness costs nothing and has a higher rate of return than any other investment.

Review savings

Automate savings strategically. Find the balance between long-term investing and providing for short-term emergencies. Once you’ve built up your emergency fund, redirect those monthly savings. For example, set up a unit trust portfolio to get more market exposure, or increase home loan repayments. Review savings debit orders regularly, especially after salary increases, interest rate changes or a change in life goals.

Practice delayed gratification

The ability to delay gratification can have important consequences for financial decisions: every purchase made now can delay achieving financial freedom.

Ignore short-term market noise

Short-term market fluctuations due to political and economic instability are expected. Daily, weekly, even monthly market fluctuations shouldn’t distract long-term investors from their investment goals. Time in the market matters most.

Communicate openly

Talk to your partner and/or children daily about money and personal finances. Be open about your financial goals and how you plan to achieve them. Have age-appropriate discussions with your kids, ensuring money conversations are framed positively. Ask ‘‘how can we afford it?’’ rather than saying ‘‘we can’t afford it’’. Don’t keep financial secrets from your partner.

Give

A recent Oregon University study shows charitable giving creates a brain response that elicits a pleasure surge.

Craig Torr is co-founder of Crue Invest

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