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<p><strong>By: Ray Mhere, Head of Momentum Investments Distribution</strong></p>

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<p>While financial wealth means different things to different people, most will agree that having more money allows for greater flexibility in our life choices. That said, there is a major misconception that this flexibility is purely a function of income; that with increased income comes greater wealth. In reality, this just isn’t the case.</p>

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<p>This is according to Ray Mhere, Head of Momentum Investments Distribution, who argues that wealth is far more a function of people’s spending habits, than their income.</p>

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<p>“This is a reality that I have always known to be true in theory, but it has become abundantly clear amid the COVID-19 crisis, with many of us cutting back expenses under ‘lockdown’ by foregoing certain luxuries,” says Mhere. “The overpriced coffees; meals at restaurants; and weekly haircuts – are all these luxuries really necessary?”</p>

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<h4>As such, here are five good spending habits that Mhere is taking with him into life after lockdown.</h4>

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<ol><li><strong>Planned weekly grocery shops</strong></li></ol>

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<p>Rather than popping into the shops every other day, Mhere says he has committed to continue doing his grocery shopping on a weekly basis, with a planned list. “I had gotten into the unhealthy habit of just stopping by the shops on my way home from work, and grabbing whatever I needed on that day. In doing bigger, less frequent shops during lockdown, I found that I got far more bang for my buck and even saved on petrol driving to and from the shops daily.” </p>

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<ol start="2"><li><strong>Mindful purchasing</strong></li></ol>

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<p>Early this year, my wife and I had our second little girl. One of the things that I thought would make our lives easier was buying a bigger car. I had even spoken to one or two dealerships and was starting to picture myself in a shiny new upgrade. Then, lockdown happened and everything was put on hold. The news cycle became worse and it then dawned on me that a new car would be the last thing I wanted if I lost my job. That put everything in perspective for me and I am happy to say that I am still the proud owner of a 2008 hatchback. When making big purchases, rather wait a few days or even months before swiping your card. That way you will avoid making impulse purchases and only end up with things you really need.</p>

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<ol start="3"><li><strong>Understand your Rewards Programmes</strong></li></ol>

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<p>These days almost all product and service providers have some sort of rewards programme. Do you fully understand how they work in order to take full advantage of them? Some of these programmes are designed to be very beneficial if you simply change your behaviour in a way that benefits you and the product provider. This is called shared value. Make sure you understand your rewards programmes, and where it makes sense, why not change your behaviour in order to get the maximum value out of something that you are paying for anyway?</p>

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<p>“Momentum Multiply is designed to reward members for everyday activities that help them live healthier, safer and financially secure. To ensure that our members continue to benefit from our rewards during lockdown, we made some adjustments to help them. Using our rewards programme effectively, such as shopping at one of our retail partners, not only allows our members to stretch their money, but gives them the added benefit of saving more,” says Mhere. </p>

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<ol start="4"><li><strong>Comb through your expenses</strong></li></ol>

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<p>During lockdown, I’ve had a bit more time to reflect on my spending habits. Starting with a scan of my bank statement on a monthly basis. While doing this I found a subscription to a news app that I had been paying for but never used. My wife also found that she had recently been debited for something that was advertised as a free trial but the fine print stated that you would start paying after the first month. In this day and age of multiple swipes of your debit card a day, it is quite easy to miss certain line items, especially if they are not large sums. Take a fine-tooth-comb to your statements and scrutinise every line item.</p>

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<ol start="5"><li><strong>Review your debit orders</strong></li></ol>

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<p>Often, we see a line item such as insurance or cell phone contract on our bank statements. We pay very little attention to them because these are essentials that cannot be cut from the budget. You may not be able to cut them but in many circumstances, there is room to trim them. I’m fortunate enough to have my father-in-law as my short-term insurance broker. He reminds me every year to update my policy in order to be fully covered should anything happen. He also adjusts the value of our vehicles annually so that we aren’t over-insured for something that the insurer will only pay so much for. So, although the premium goes up every year, it goes up less than inflation because of the adjustment to the cost of our vehicles that are a year older.</p>

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<p>Similarly, with phone contracts, don’t just renew them. Check to see if you are in fact, using all the data and minutes that you are paying for. If not, reduce the contract at the next upgrade date. </p>

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<p>Just by consistently practising these five simple spending habits, Mhere says that people will be surprised by how much they can save over time. “It may seem like little bits of insignificant savings here and there, but it really does all add up. These cumulative savings can then be put towards a retirement annuity or long-term investment, and you can sit back and watch your wealth grow,” he concludes.</p>

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