• Advice

The Money Mentor – How To Manage Your Spending

Financial advice podcast

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7. How to Manage Your Spending

Dave: “Here’s a tactic to control the random spending in your life.

Draw the appropriate amount out of your bank every week as cash. So if you’re spending $150 on coffee and random things, go and get it out of the ATM machine and then that’s the amount allocated for you and your partner.

When it’s gone, it’s gone.

Otherwise, you’ll take your credit card out, you get little drunk and think, “Oh, let’s have another round of drinks boys” and you’ll be spending another 200 dollars before you know it. If you left home only with a 100 bucks in your pocket, you’d be OK and once you’ve run out maybe it’s a good time to go home anyway.”

Interviewer: “Mate, that’s great advice, actually seeing the cash disappearing out of your hands. The psychology around that is that no one likes giving money away. Using the credit card is just far too easy and especially now that you can pay with your phones. You just tap and go. Yeah, it just feels too easy, doesn’t it?”

Dave: “That’s easy. Take your EFTPOS card off your phone. Disable it when you’re going out because alcohol makes your wallet feel a little bit loose. You then wake up in the morning: “oh gosh, look I’ve spent all that money!” If you just take cash, you know exactly what you’ve got. You can work out what you can afford to spend before you go out for the evening and you won’t overspend if you only have cash.”

Interviewer: “I reckon your wallet & account balance is the real hangover, once you’ve realised how much you’ve spent. You’ll probably go home and maybe your partner gives you a whole lot of grief around it as well, and that’s the real headache.

So card habits – that’s a really good piece of advice, Dave.”

Next: 8. Tips On How to Take Out a Loan (Borrow Money) >

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