How to end bad money habits – three personal accounts

Many of us have bad money habits that prevent us from achieving cherished ambitions, such as saving for a wedding or owning our first home. We can be our own worst enemies, compromising future gains through our current behaviour.  

We asked three South Africans to reveal their bad money habits, and share how they overcame them.

Tip: Starting a “rainy day” fund can help to cushion the blow of a financial fallout. Start saving with an investment account today.

“I didn’t save – until I had a medical emergency”

Erica Fairley, a 26-year-old hairdresser, says her worst money habit was spending rather than saving.

“I spent my income on bills and entertainment and didn’t set up a ‘rainy day’ fund,” she explains.

Erica had no medical aid, and avoided going to the doctor because she couldn’t afford the expense. A health crisis was the turning point that caused her to reprioritise.

“A few months ago, I had a medical emergency,” she says. “I didn’t go to the doctor and decided to self-medicate. Thankfully, my mother paid me a surprise visit and took me to see a doctor. Two days later, I was in hospital recovering from an emergency appendectomy.”

The experience frightened Erica into saving.

“I immediately opened a savings account and the first thing I do every month, after I receive my salary, is put some money aside for myself.”

Erica’s top tip to save instead of spend: Pay yourself first. Start saving in an account that offers high interest, no matter how small the amount. Add to it monthly, and add extra as and when you can.

“I paid too much interest on store accounts and credit cards”

Financial responsibility didn’t come naturally to Ismail Seedat. The 50-year-old physiotherapist lived at home when he was single, and used store accounts and credit cards liberally because his living expenses were low.

Marriage, a new home, and a baby on the way brought some financial pressures.

“My wife and I both worked gruelling hours and made a decent joint income, but we still stressed about how we would manage once our baby was born,” he recalls.

A friend who worked in finance helped Ismail draw up a budget to identify his expenses. He was speechless when he realised how much interest he was paying on store accounts and credit cards.

“It took me a few months to pay off my debt. I cut up most of my cards, but still have one last store card and credit card, as a reminder of those dark days,” he says.

“I’ve used the store card only once, but ensured I bought within my means, took the interest-free option, and stuck to the payment obligation. The credit card is there for emergencies only. Almost 15 years later, I can safely say I have learnt an important lesson and I’m no longer living on credit.”

Ismail’s top tip to cut out excess credit: Speak to someone you trust who can advise you on how to improve your finances. Heed their advice and thank them later.

“I spent astronomical amounts on cigarettes”

For 45-year-old consultant Jabu Sithole, a 20-a-day cigarette habit cost him dearly. 

“The amount I paid monthly was astronomical – I was burning my money away,” he says.

The pandemic lockdown forced him to quit smoking, but not before going through a painful withdrawal. Aside from the apparent health benefits of stopping, he soon found he had more cash.

“Having a little extra money for dinner with my partner, or being able to buy the watch I’ve been coveting for years, increased my resolve not to smoke again.”

Jabu's top tip to quit with a damaging expense: “You can’t always do it on your own. Get the help you need to overcome nicotine or any other dependency. It’s worth it to enjoy spoils that were out of reach before and to be able to save.”

Tip: Debt consolidation will allow you to repay existing loans at a lower interest rate.