A salesman's training manual will tell you that most people buy based on emotion and then justify their purchase with logical reasons afterwards. This is the basis for impulse buying but it underpins so many other reasons we buy stuff and this emotional basis for buying 99% of the “stuff” we run our lives with is something retailers and salespeople understand only too well … which is why they take such great advantage of it!



“Money talks!” is a popular term and the reality is that it does – it says, “Goodbye!” unless you are prepared to take control over your emotions and how you use money and the forms of credit which come with it.

Many people fall into financial difficulty because of how they approach their own attitude to money and how they spend it; most people fall into debt not because they made a mistake but because they made a bad choice or a series of bad decisions which bring them to the current financial situation. At any stage in this series of bad decisions, they could have made one good decision and set themselves on a completely different path which will lead them away from financial disaster and towards debt freedom.

A good exercise is to take a piece of paper and write down what you have purchased in the last week and why you bought it – also, how did you pay for your purchases; with cash, a debit card or with a credit card? It is very helpful if you understand how you got yourself into debt and what spending habits led you to having too much of the month left for your paycheck!

One bad habit with managing your finances is not to pay attention to what you are earning and what you must cover in terms of essential expenses such as housing, utilities and travel to and from work. Budgeting is an excellent discipline which many people simply do not follow or stick to and for many that do, they simply are not realistic in how they set their budgets. Establishing a realistic budget is essential but like many other things in life, you must review it frequently so that it remains appropriate and keeps you on track.

Good habits to follow include balancing your budget and accounting for your expenditures each week or each month as the case may be. A very good practice is to save up an emergency fund to cover any unexpected crisis which may occur – open a savings account and contribute an affordable amount to it each paycheck. You will be surprised at how quickly it mounts up and especially if you do not dip into it!

When planning on getting out of debt, it is important that you do not rack up further interest and debts paying off your existing loans. Make it a priority to repay your credit cards and pay them off each month so you do not accumulate charges and debt which carries extremely high interest rates. Resist the urge to pay off other debts or make monthly repayments by taking cash advances against a credit card – this robbing Peter to pay Paul approach is the beginning of an endless downward spiral into even greater debt.