I was a shopaholic! Six Steps to Curb Compulsive Spending

You’re doing everything you can to optimise your finances—you picked up a few side gigs, you made a budget, you learned how to spend your dollars more wisely at the grocery store.

And yet, at the end of the month when you check your bank account, you’re still disappointed. The problem? Impulse spending.

You know the kind of spending we’re talking about. Work is a little slow so you visit e-commerce site and 15 minutes later, you’ve got a bunch of random stuff you just need in your shopping cart. Or you see an amazing sale on flights and decide, without thinking, that now is a good time for a weekend getaway. While waiting in line at the grocery store, you grab a tube of lip gloss and toss it in your cart.

Compulsive spending and shopping addiction both require immediate attention. And when you think what you have is more than just a shopping spree, you basically need help. In here, you’d get to learn some of the most effective ways that you can do to overcome the supposed-to-be “retail therapy” you seem to overdo that perhaps led you to “shopping addiction”.

Are you finding difficulty in managing the personal Finance?

We at Moneymindz.com will make it easy for you. Just give us a missed call on 022-62116588 to explore our India’s best Free Advisory Service.

MONEYMINDZ DO NOT SELL ANY FINANCIAL PRODUCTS, WE ONLY PROVIDE UNBIASED, FREE, ON PHONE FINANCIAL ASSISTANCE

First Things First: Check if you’re A Certified Shopaholic.

Shopping has been one of the most popular and widely practiced pastimes of many people around the world. Though most of us give in to occasional impulse buying, experts say that doing so is still normal as we only try to make ourselves feel satisfied of being able to acquire something we really like.

If you’re tired of feeling bad about spending impulsively (ugh, the guilt), don’t worry

Cut up your credit cards. Do it today. “But I need them for an emergency.” “But I get cash back.” “But they’re convenient.” No buts. If you have a problem with compulsive spending, destroy your credit cards now. Don’t jot the numbers down someplace “just in case”. I’ve done this in the past, and I know how easy it is to go to your desk drawer, pull out the numbers, and place an order online. Get rid of the credit cards completely. (Do not attempt to cancel your accounts, however, until you’ve paid everything you owe.)

Only carry cash. Don’t use checkbook. Don’t even use a debit card. Inconvenient? Absolutely, but that’s the point. If you’re a compulsive spender, your goal is to break the habit. To do this, you’ve got to make sacrifices. You’ve also got to begin to make the connection between buying something and actually spending money. Plastic (and to some degree checks) make this connection fuzzy. Use cash.

Track every penny you spend. When I was addicted to shopping, I intentionally turned a blind eye to how much I was spending. But most of the time, I wasn’t even aware of how much I spent. Lunch every day at McDonald’s? How much could that possibly cost? (Answer: over Rs 100 / Per Day) Picking up a few comics on my way home from work? What harm was there in that? Once I began to track my spending, certain patterns became clear. When I saw the patterns, I was able to act on them.

Play mind games. For some people, money is not an emotional issue. They understand it intuitively. They’re able to make the smart choices without temptation to do otherwise. For most of us, though, money is more about mind than it is about math. For us, it can be useful to play tricks on ourselves. What do I mean by mind games?

• Use the 30-day rule to control impulse spending.

• Ask yourself: “Is this a want or a need?” Try to discover what is motivating the purchase.

• Tax yourself: Whenever you buy something, force yourself to set aside some set percentage as savings.

• When you’re tempted to buy something, write it down. Make a wishlist. I do this at in some e -commerce site in order to control my spending. I have a gigantic wishlist which I prune occasionally. This wishlist keeps me from actually buying things!

• Yes, these are simple little tricks. But they’re tricks that work. If they can help you stop spending, that’s all that matters.

Avoid temptation. The best way for me to avoid spending money on comic books is to not enter the comic book shop. If your weakness is music, stay out of the record store (or de-activate your iTunes account). If you tend to spend money at big department stores, then stay out of them. Avoid the places where you’d normally spend.

Ask for help. Beating an addiction can be tough when you’re going it alone. Seek support from your friends and family. Ask your spouse to help. (And be open when they call you on your actions — don’t get angry.)

Finally, consider seeking professional help. There is no shame in obtaining psychotherapy for problems that seem bigger than you. Ultimately you must look inward to overcome any form of addiction — a therapist is like a trained guide who can help you find the way.

Importance point for checklist before buying health insurance

Health insurance insurance.

Right from the inception of health insurance in India, it has seen a lot of changes. Till 2010, more than one-fourth of India’s population has insured their and their family’s health in some form or other. The first health insurance company was launched in 1986, and since then, the industry has constantly evolved itself. Health insurance industry has developed a lot in past 5 years.

Many of us buy health insurance with the sole objective of saving tax but fail to consider the importance of buying a comprehensive medical insurance plan. More than 80 percent of financial crisis originate out of a medical emergency and the same can severely damage one’s finances. Health emergency will not only require funds for treatment but for most of us will also hurt our ability to earn thus hitting us with a double impact. Imagine losing a family member because you cannot afford to give him the best medical treatment. So health insurance is a must today.

With increasing healthcare costs, the reason to get health protection as early as possible is gaining importance because once we get some issues like BP, Diabetes the chances of getting a health cover go low and the cost goes high. There’s nothing more satisfying than to pay a small price and get peace of mind.

The 10 rules to keep in mind when you buy health Insurance –

Tip 1 – You must have an individual health insurance even if your company offers you a corporate group health cover. There could be a possibility that your corporate cover will cease once you leave your job or retire and the company may also decide to withdraw this benefit or choose to leave other family members out of the coverage. If one is suffering from a chronic disease, this becomes more important. You can even take a Super Top up if you can’t afford a full individual Medicalim.

Tip 2 – Choose the right amount as ‘sum insured – While selecting a Sum Insured you need to keep the today’s costs in mind. If you are the one who is putting in a small city then your aim of cover should at least be ranging from Rs.3 to 5 lakh whereas if you live in a metropolitan than your cover should not fall anywhere less than Rs. 5 – 10 lakh. Also, you can move from one insurer to another through porting. Don’t buy a new plan but instead port your plan. With porting your benefits which have been already accumulated in the old plan gets transferred to the new plan. Also remember to keep on increasing your health cover from time to time to take care of the medical inflation.

Tip 3 – Get early protection – Buy a health cover as early in life as possible and definitely before you turn 40. As you are likely to make no or few claims in earlier stages of life, you can get the benefit of no-claims bonus and add up to the original coverage every claim-free year.

Tip 4 – Buy only a health cover which gives you lifetime renewability. Your aim is to have a health cover at older ages when you will have ailments and that protection is possible only if your policy offers lifetime renewability.





Tip 5 – Never buy a health insurance policy which has a claim loading – if you get a critical illness which requires long term cure then with a claim loading your premiums will keep on increasing and soon may become un-affordable. So don’t fall into that trap.

Tip 6 -It is advisable to check the list of network hospitals before you go for the policy. Check whether hospitals in and around your locality are enlisted or not, as this may help you during availing cashless claims during an emergency situation. Also check whether multi-specialty hospitals of your city are enlisted or not, as this may help you to get specialized treatment without spending a lot of money.

How to spend your bonus wisely ?

You've earned your bonus and you're entitled to enjoy it. But if you want to get the most out of it, use it wisely.

An annual bonus provides you with an opportunity to give your finances a boost, as long as you resist going on a buying spree over the festive season.

This year make a concerted effort not to blow your bonus. Ensure your bonus puts money in your pocket for the rest of next year - and beyond - by using it in one or more of the following ways.

The windfall of great riches can, if mismanaged, make things worse, not better, for the recipients," said American author and Professor Michael Mandelbaum.

But you don't need a college degree to know that extra cash shouldn't be spent frivolously — that part is easy. The hard part is actually figuring out what exactly qualifies as a good way to use a small windfall. Here are six simple — and most importantly, smart — things to do with your bonus or commission check.

Finding difficulty in investment and financial planning? We at Moneymindz.com will make it easy for you. Just give us a missed call on 022-62116588 to explore our India’s best Free Advisory Service.

MONEYMINDZ DO NOT SELL ANY FINANCIAL PRODUCTS, WE ONLY PROVIDE UNBIASED, FREE, ON PHONE FINANCIAL ASSISTANCE.

                  Here are some ways to earn your bonus wisely

Pay off your Debts 

If you cannot settle all your debts at once with your bonus, at least make a start at conquering your debts.

Check the interest rates that apply to your various debts and pay off the more expensive ones first. This is likely to be your credit and store cards.

Although interest rates may drop further, at some stage they will increase again. When interest rates go up, debt becomes more expensive. Many people have lost their homes or had their cars repossessed because they could not afford the repayments after an increase in interest rates.

Easy credit and festive season offers, such as discount vouchers accompanying new accounts, make it easy to overspend, so try to keep a tight reign on your spending this season, rather than face the consequences of not being able to pay your debts in the new year.

Look at your insurance plans

Check if you have sufficient life and health insurance cover. If you are just starting out on your career and are relying only on the employer’s group insurance, the Diwali bonus can be used to buy a term plan or a health plan. As a married individual with a family, there is a case to use the Diwali bonus towards investing in a family floater plan.

Invest in emergency fund

A Yearly bonus can be your best bet to start an emergency fund if you do not have one already. Invest in high liquidity instruments like bank fixed deposits or liquid funds to ensure you are cash ready when faced with any financial emergency.

Boost your retirement savings

Even if you contribute to an employer-sponsored retirement fund, it is unlikely that your retirement benefit from your company pension or provident fund will provide you with an adequate income until you die. If the rules of your fun

Invest in your children's' education

The cost of education - especially at private schools and universities - keeps rising.

Ideally, you should start saving for your child's education from the day he or she is born. But even if your child has started school, an investment in a five-year endowment policy could ease your burden significantly years from now.

Give the taxman his due

If you have earned additional income in the past year on which you have not yet paid tax, you need to prepare yourself for a tax bill from the South African Revenue Service.

If you don't have money to pay tax when it is called for, you may be liable for interest and penalties. To avoid this, put some or all of your bonus aside for tax.

Common Money Fears and How to Conquer Them

Money brings up all kinds of emotions within us. But the one that is more or less constant throughout and among many people is ‘Fear’. We fear to talk about it, earn too much, earn too less etc. Fear is deeply seated in our genetic drive to survive – this cannot be speedily wiped away with facts and figures.

We as a financial planner understand that – also how these emotions influence our financial decisions. In the beginning of financial planning process, we do few exercises with our clients to understand these emotions & stories behind these emotions – our punch line says “understanding people before numbers”.

Finding difficulty in investment and financial planning? We at Moneymindz.com will make it easy for you. Just give us a missed call on 022-62116588 to explore our India’s best Free Advisory Service.

MONEYMINDZ DO NOT SELL ANY FINANCIAL PRODUCTS, WE ONLY PROVIDE UNBIASED, FREE, ON PHONE FINANCIAL ASSISTANCE.

6 Money Fears & how to overcome

1) I will lose all my money

We work hard to earn money and always want to save more and earn more. Many of us lose money too due to a bad investment, wrong decision or inflation. But this is something we are forever scared of and always have nightmares of investments going wrong or getting cheated of our money. We are scared to take money decisions as we are scared that the decision will make us lose all our money.

2) I will lose my job

Companies are very competitive and always look for ways to increase profits and reduce costs. One way to reduce costs is to ask employees to leave the company. During recession and tough times, they might lay off people. We cannot be constantly scared of this as this might make us anxious and affect work performance negatively.

Instead of being worried about getting laid off, it is best to work efficiently. It is important to blend in the culture of the organization that one is working in. It is important to take up new responsibilities, additional responsibilities and also upgrade one’s skills so that in case of extreme situations, one can get a new job or a different role in the organization. Building emergency fund can also add some confidence.

3) I will never have enough money

We are always worried if we will outlive our wealth. We feel we will never have enough money considering increased life expectancy and medical emergencies of old age. But this is again irrational.

We should make a financial plan in which we set up the retirement goals. The retirement goals should be such that we know how much money we need to sustain the lifestyle that we need and other goals that we might like to achieve when we retire. We should then work on executing the financial plan so that we have enough money. The financial plan should be reviewed regularly and tweaked if necessary.

4) I will make mistakes while managing my money

We work hard to earn money and therefore are very scared to lose it. We let the money lie idle in the savings bank account thinking that we might make bad investment decisions which will lead us to lose money.

Instead of worrying like this, we should take steps to increase our financial and investment knowledge. We should take small steps in investment. We should start off with zero or low risk investments and then graduate to more risky investments. At the same time, our investments should march our risk taking ability from an emotional and financial perspective.

5) My online financial identity will get stolen

Today we do a lot of money based transactions online. We use credit cards often. This leads to the fear of getting our accounts hacked or credit cards duplicated. This is not irrational as the number of cyber crime cases are increasing but we can take steps to secure our online financial life.

We should not share usernames and passwords of online accounts with others. We should monitor financial statements regularly so that if a fraud is committed, we can act quickly. We should update our contact numbers and address with the bank and not click on suspicious links. We can control the security of our online financial transactions.

6) I am scared of talking about money

We are superstitious when it comes to money. We also don’t think rationally many times when it comes to money. We feel we will lose money if we talk about how much we have. We feel others have too much or too less compared to us and don’t want to talk about it. We feel ashamed to talk about bad investment choices.

But it is important to talk about money with people whom we can trust. Married couples should talk about money, money habits and money choices so that both are aware of how much money is there and how much is needed and what can be done to improve the finances. You can take advice from your parents about managing money as they may have gone through situations that you are facing at different stages of life.

Fear is a strong emotion and too much of it can hurt your frame of mind. It is important to think about money and be aware of various possibilities that can happen to our finances but instead of being scared about them, one should plan the finances and take the right steps to be financially secure.