The RBA and government made announcements yesterday
A new bank has taken the crown this year in a reshuffle of which banks brokers are rating the best
- 2018 Commercial Lenders Roundtable
- Top 10 Brokerages 2018
- 2018 Brokers on Aggregators
Let me take you back to a time before credit cards, before tap and go, before the whole “buy now and worry about it later” mentality. The truth is, this wasn’t all that long ago and while there are now countless ways to get what you want when you want it, even if you can’t afford it, the question is, should we all behave a little more like our grandparents when it comes to spending?
To our grandparents the way we now spend and borrow money is completely foreign. In their day if you couldn’t afford it you didn’t buy it, simple. They might have been able to layby, meaning the shop would put what you wanted aside for you and you would pay it off, only receiving what you had brought when it was fully paid. That’s very different to going into a store or going online and buying something with money you don’t have, or worse still, paying 18% plus in interest in the process. The fact is our grandparents did just fine with less and typically their finances were far more in control than many of ours today.
Of course, our grandparents wanted nice things just like us, and if they could have simply charged to a card, their spending behaviour would most likely have been similar. However, the fact is there were far less options for buying things back then, which perhaps was a blessing when you look at household debt levels today.
Naturally there are things we all need regardless of the era, such as a roof over our head, a fridge and washing machine etc. In our grandparents’ generation no one thought of walking into a department store and buying a house full of stuff on credit, it just didn’t enter their mind as it wasn’t an option.
I’m sure your grandparents and their parents before them worked hard and got what they needed the old fashion way, meaning they bought what they could afford. In many ways, our grandparents lived quite simply when compared to things today and when I say simply, I mean they didn’t spend money they didn’t have on things they didn’t really want or need. I know what you’re thinking, bugger that, I want the nice stuff and I want it now. I get it, me too!
I’m not suggesting you should sit in the dark on an old couch or buy your clothes from Vinnies, I’m just saying perhaps spend a little more time working out what it is you really want and try not to go into debt for things that you will probably be just as happy without.
That’s the key word really: happy. Many of us think that buying stuff is the key to happiness. While buying things with money might bring us short term gratification, buying things with debt almost certainly won’t, in fact it can do the exact opposite and leave you feeling trapped by debt.
If you want to get back in control of your finances and reduce your debts, it starts with your spending habits. Here’s a few things you can do to spend a little more like your grandparents:
- Take all but one credit card out of your wallet. If the credit’s not there you can’t use it.
- If you see something you like in a shop that you just must have, don’t buy it until the next day. Sometimes when you really think about it you might not want it as badly as you thought.
- If you absolutely have to have it, go to the ATM and take the cash out of your bank or get a cash withdrawal from your credit card. As you hand over your hard-earned or borrowed money you might find you don’t want it quite as much as you thought. There’s nothing like handing over real money to put a purchase in perspective.
There’s no doubt the next few months are going to be challenging for all of us and even a small change in your spending behaviour can make a huge difference and help you to own instead of owe, just like your grandparents.
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