By Allison Tait
MSN NZ Money writer
Are you a financial saint or (like most of us) is your halo a little bent? Well your mortal wealth may be in danger...
You've probably heard of the seven deadly sins they're the transgressions we humans make that keep us from making the most of our spiritual selves. Stuff like lust, anger, greed … sound familiar?
Well, those deadly sins have a way of crossing boundaries. It's not just your immortal soul that may be in danger, but your mortal wealth as well. It seems those little transgressions can have a big impact when it comes to your financial health.
If your current money plan is of the 'wing and a prayer' variety, chances are you're committing one (or more) of the seven deadly money sins. But don't panic. Once recognised, they can be worked on and expunged. And hallelujah, you too can be saved!
Sloth (also known as 'sheer idleness' and 'bone lazy') is number one on the sin parade for good reason: we've pretty much all been there at some point. Have you ever thought 'I really must make a budget' and done nothing about it? Sloth! Have you ever considered a savings account and failed to follow through? Sloth!
The antidote to this sin is simple: action. Make a plan. Write down your budget; research the Internet savings account with the highest interest rate and then actually apply to open an account. Keep the first steps simple and the rest will follow.
Oh, and if you're lying around waiting for Prince/ss Charming to sweep in and save you from a life of poverty, take a reality check: Prince/ss Charming types are in extremely short supply. In fact, last time we checked, Sleeping Beauty, Cinderella, et al had pretty much cornered the market.
They say that 'to err is human'. In the consumer society we've created, we could also say 'to envy is human'. It's difficult not to want what you have not got when an entire industry (advertising) is designed to get you in the mood. Having said that, allowing your desire to keep up with the neighbours is a recipe for financial disaster. The grass may well be greener on their side of the fence, but do you need to spend a small fortune on landscaping to try to compete? Probably not.
Keeping envy in check is not easy. Having a sound financial plan and sticking to it means that you at least build some thinking time in to that decision to call in the Backyard Blitz team. If you find yourself going green over something that someone else has, don't rush out immediately and transact a major purchase. Tell yourself that you can have it at the end of the month, if you still want it chances are the fires will have cooled.
The sin of gluttony is defined as 'an inordinate desire to consume more than one requires'. Also known as the 'try stopping at one' sin. Whether it's clothes, food or houses, we're encouraged to buy more, more, more. No wonder, then, that our lives are cluttered with stuff, our debt per household is at its highest level ever. The Organisation for Economic Co-operation and Development (OECD) reports that household debt in New Zealand has climbed sharply to around 160 percent of disposable income, a ratio that is higher than in most other OECD countries.*
If finance experts have one overall message to share (beyond the 'create a budget' catch-cry, that is) it's this: it's difficult to create wealth when you're carrying a heavy burden of non-deductible debt. If you can restrict your appetite for the good things now, chances are you'll be able to indulge a lot more freely in the future.
Often touted as the sin from which all others arise, pride is not just about vanity and paying over the odds for your facials. Are you spending more than half your income on rent, just to live at an address you feel is 'suitable'? Do you live week to week, spending everything you earn to maintain a lifestyle that you really can't afford? Would you default on the rent rather than admit to friends that you can't afford another night out? It's not easy to accept that you have champagne tastes on a beer budget (as your gran would say), but the sooner you do, the sooner you'll be able to afford that Moet for real. Choosing a more realistic place to live or accepting that a couple of nights in front of the box won't kill you might allow you to make some inroads into that savings or investment plan you've been feeling guilty about (see Sloth). Small changes can make a big difference.
Hmm … lust. Swept up in the passion of the moment, we do all sorts of strange things — like paying off one credit card with another so we can have the $2200 Gucci platform heels of the moment. A word of warning: those shoes you 'must have or you'll just die' equals killing credit card debt. If you're still paying off last December's spending spree, you'll know exactly what we mean.
You know the drill: pay the card off in full, keep the number of cards to a minimum, yada yada yada. Or to really take the heat out of lust, you could try the old credit card in the freezer trick: by the time the ice melts enough for you to use it, you might find that the $200 knock-off platforms are just as passion-worthy.
You never have any cash and Lord it makes you cross. Trouble is, you blame everyone but yourself. By the time you get through the boss who doesn't pay you enough, the shops that rip you off, the banks that charge too many fees, the boy/girlfriend who doesn't believe in paying and the credit card company that seems to, like, want money back every month, you're too spent to focus on the real root of the problem: you. It's time to put some calm back into your finances. Whether you meditate, channel Zen or get a financial counsellor to help, take a look at your money plan with a less aggro eye and you may be able to see where it's all going wrong. Then you'll be in the black instead of seeing red!
Back in the 1980s, a lizardy Michael Douglas told us that 'greed is good'. But that was the '80s, before the dotcom bubble burst and it was a movie, for heaven's sake. Greed is defined as the 'desire for material wealth at all cost' and as anyone who's ever experienced a mid-life crisis can tell you, it's not all it's cracked up to be. Are you working in a job you hate because the pay's good? Unfortunately, the old cliché that money doesn't buy happiness got its cliché status because it's true. Life coaches work off the premise that if you work at something you love, you won't feel as though you're working at all. And that can only be good.
Just as a footnote to that, remember that donations to charity are tax-deductible. So holding onto it all for yourself may be satisfying, but giving to others might work better for you on June 30.