With the petrol and diesel prices about to go up AGAIN I thought this might be a good time to ask this question. We know a good chunk of our money is spent on filling up our vehicles, but where does the rest go? Half way through the month you glance over you state of affairs, namely your bank account, and you find yourself at a loss for words. You gasp for air, thinking ‘What did i spend my money on?’ Some months are heavier than others depending on what financial surprise life has decided to throw your way, but there must be a better way to plan your month financially and avoid being broke by the end of the month? For some people your salaries may be minimal, but that does not mean you cannot get by without being penniless in your last week before payday; living off bread and baked beans.
Different LSM (Living Standard Measurement) groups will spend their money differently, not only because their earnings vary but mainly because their lifestyles are so unlike. The people who are likely to read this will fall in to LSM 7 to 10. LSM 7 to 10 monthly incomes differ depending on where you get your information but the basic range is from R5500 a month to R24000 and higher a month, respectively. These LSM groups make a 41% contribution to the FMCG spend and they shop at retail outlets on a average of 9 times a month. Of course if you have more money to spend you will find something to spend it on, but this is just to give you an outline of where you fit in to in South Africa’s economy. These LSM classifications help advertisers narrow their target markets. So every time you see an advert that you think may be directed at you, it probably is. The Advert was most likely partly based on the LSM group you fall in to so they know what you like to spend your money on and how much of it you have to spend a month.
The majority of people spend their money on rent or bond repayments, groceries, petrol, gym or sports clubs, entertainment, toiletries, household products, personal care, internet, magazine subscriptions,debt repayment, electricity and monthly cellphone contracts. You may even have Top-tv or DStv which costs a pretty penny every month. Marketers love to tie us in to contracts, so be cautious of that. I am sure we could all name many things we spend out money on, but the thing is we do not realise how quickly money can just run out if you do not keep track of it. Cars seem to be on the top of the list when it comes to what people spend their money on. The interest rate may be low now, but once it goes up and your monthly installments on your car go up, do you think you will be able to afford your car as well as your lifestyle then? After cars people seem to be spending money on entertainment, then clothing and footwear. I know some people who spend up to R1500 on a night out and that is not even a big night out for them. If you live off a budget it seems crazy to go out with your plastic, because we all know once the alcohol begins flowing you stop caring about needing money for the rest of the month.
You should have a list of what you actually need to live and what you want. Be realistic about your needs and wants, because they are very different things. It may seem like a big waste of time, but it may save you the couple of bucks you need until the next payday. People have different opinions about spending and saving money. Some even use the argument that you do not live forever so you might as well enjoy your money while you can. I could not agree more that you should enjoy your money, but what happens when you reach a ripe old age and you spent all your youth living it up and now you have nothing to support yourself? Watch out for marketing tactics these days. You will be surprised at how they can create a need you never knew you had.There is so much pressure for many people to live beyond their means, but if you cannot afford something rather say no thank you, maybe next month.