living
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people are raised plays a huge part – did
their parents view money as something
they could rely on to keep them safe, or
make them happy, or did they treat it as
a necessary evil, associating it with greed
and avarice.”
Upbringing is one factor that influences
our spending habits, but there are several
others besides, says Dr Halari. Social
media and peer pressure, which can drive
consumerism; the march towards cashless
societies, which is turning money into a
virtual asset that sadly produces all-too-real
debt; personality – some of us are prone to
impulse buying and are naturally more
materialistic than others; and self-image- for adults and children, shopping can be
a coping mechanism and the acquisition of
the latest toys, clothes and gadgets a way
of boosting self-esteem.
Importantly, none of this means that our
relationship with money can’t be changed.
It can. A predisposition to impulse buying
and our parents’ attitudes towards money do
not have to be our own. We might need help
to form new spending habits but with the
right advice we can reframe our relationship
with money and let go of the stress and
anxiety it may have caused us in the past.
If you are reading this feature and feeling
uncomfortable about your finances, please don’t
suffer alone. Organisations such as the Money
Advice Service (moneyadviceservice.org.uk /
0800 138 7777); Pay Plan (payplan.com / 0800
280 2816); Citizens Advice (citizensadvice.org.uk
/ 0344 411 1444) and debt charity, StepChange
(stepchange.org / 0800 138 1111) all offer free
advice and can help you. You may not be able
to see a way out of debt, but they can.STAYING ON TOP
OF YOUR FINANCES1
B udget: this underpins everything, and if you can’t
stay within your budget, you will always run the
risk of falling into debt. To stay solvent, you have to
spend less than you earn, which sounds simple
enough but is difficult when wages, particularly in
major cities, haven’t kept up with the cost of living
and, specifically, with the cost of housing. Budgeting
can involve enormous compromise – you may need
to find cheaper accommodation – and always involves
being intentional when you spend. You can’t afford to be
passive – you have to think about every purchase and
limit unnecessary expenditure.2
Have a safety net: again, this takes work but is
essential. Life can change in an instant – you
can lose your job, become ill, split from your partner,
and without an emergency fund to keep you going,
you could end up in trouble. I advise people to aim for
enough to cover six months’ expenses – it may take
a while to reach that amount, but stick with it. And if you
get a pay rise, use that money to boost your fund. Its
purpose is purely to keep you and your family fed,
warm and housed if disaster strikes.3
Debt is a killer: it contributes to broken relationships,
mental illness and even suicide so is to be avoided
like the plague it is. The worst debts charge high interest
and normally accrue on things that diminish in value
or are a very temporary band-aid. Credit cards fall into
this category and so do pay day loans. These are the
debts that must be cleared first. Believe it or not, there
are also good debts – these have low interest rates
and give you something that appreciates in value.
Mortgages and student loans are good debts.Pete Matthew, author of The
Meaningful Money Handbook,
shares his budgeting tips