Penny-pinching
September 2019/Fairlady 55espite working
in corporate
finance, Tahlia
Hamilton
– who is also
a food, wine and
travel blogger
(toomuchloveliness.com) – found
that she wasn’t saving as much as
she should be.
‘I wasn’t broke, but I wasn’t
using my money the way I wanted
to,’ she says. She decided to pose
the problem to her followers on
Instagram (@toomuchloveliness)
and soon discovered she wasn’t
alone. ‘I was chatting to people
who were also struggling to
prioritise saving, even though we
knew better.’
It got her thinking about
creating a financial diet. ‘We’re
not really taught how to manage
money; we don’t even like talking
about it,’ she says.
So how does a spending diet
work, exactly? Well, the concept
is based on The Financial Diet: A
Total Beginner’s Guide to Getting
Good with Money by Chelsea Fagan.
The plan is to make up your own
spending rules, which you then
share with the rest of the group so
they can keep you accountable.
‘Having a community also
motivates everyone and encourages
them to talk more openly about
money,’ says Tahlia.
‘I wanted everyone to work out
the rules that suit them best,’ she
writes on her blog. ‘Maybe you’re
starting a new corporate job and
your rule is no clothes shopping
unless it is for work. Maybe you’re
moving house, and your rule is no
luxury spending unless it is for the
home. The more personal your rules
are, the better you’ll follow them!’
The diet lasts two months, then
you get a month’s reprieve. ‘Ifound that for my lifestyle at
least, it wasn’t necessary to do it
throughout the year, but I also felt
that two months was manageable,’
Tahlia says.
In the end, she had 19
participants – from Cape Town,
Joburg and even the UK. She
created a Whatsapp group chat,
#TMLFinancialDiet, where they
could share their goals, struggles
and tips.
When Tahlia posted about
joining her financial diet, I was
also on a ‘diet diet’ of sorts (if you
missed it, I signed up for Sally-
Ann Creed’s 63 Days to Optimum
Health – there’s a write-up about
it in the July issue). I was getting
my body into better shape, but
what would thathelpif
my finances were
in a state? I’d
accumulated
debt over
the years- nothing
crazy, but I
wanted to get
it out of the
way so I could
put money
away for me
and my husband.
So I joined Tahlia’s
group and challenged
myself to give up a few of my
biggest spending vices: takeaways,
eating out, new clothes and beauty
products.
At the end of the two months
we celebrated meeting our goals
with bubbles and lunch at Tahlia’s
house, and a talk by financial
advisor Candice Paine, who loved
the #TMLFinancialDiet concept
and believes the key to its success
was the sense of community.
‘When you’re feeling a bit weak
or have a slip-up, there’s a group of
people you can talk to about it, so
you don’t lose sight of your goal,’
she says. ‘And the one-month
reprieve means you don’t feel like
you’re under the cosh all the time
but you’re still moving forward
with your savings.’
Candice also stressed the
importance of looking at what to
do with the money you’re saving.
‘Three of the most important
places you should be putting your
savings is in an emergency fund
(aim for at least three months’
salary in a short-term savings
vehicle), in your retirement annuity,
and in a tax-free savings account
(TFSA),’ she says. TFSAs are great
for long-term savings as you can
save up to R33 000 a year (that’s
R2 750a month) and
notpay tax on the
growth that your
cash is earning.
Plus there
are plenty of
underlying
investment
options
to choose
from. (The
maximum you
can put into a
TFSA over your
lifetime is R500 000.)
After two months I’d
made a sizeable dent in both my
student and my credit card debt,
and today I’m student-debt free
and close to being back in the
black on my credit card. I always
thought I wasn’t a big spender, but
the #TMLFinancialDiet showed
me I was spending all my money
on stuff I didn’t need – and at the
end of the day I had nothing really
to show for it. At the brunch, three
of my fellow #TMLFinancialDiet
sisters shared what they had
learned from the experience...D
Financial
advisor Candice
Paine also stressed
the importance
of looking at
what to do with
the money you
are saving.