Hindsight is twenty twenty” Unknown

In this post I would just like to review some of the mistakes that I have made in the past with my spending which of course there must be many since I have a huge outstanding credit card debt. My mistakes have been learning lessons for myself and hopefully for those of you who are reading this – hopefully you can avoid these mistakes. For example, my mistakes have helped me develop my fashion sense and ability to design clothes, they have taught be about value for money and where best to spend. So below is the list of what I think have been my biggest financial mistakes that I made in my youth:

1. Shopping for clothing online – Buying clothes online is a terrible idea unless you have already seen the item in person before. The reason is that you need to touch, feel and try on the clothing to know if you really will like it and if it will fit. Since I moved back to Kenya, I bought some clothes online out of desperation and some of these purchases did turn out to be a waste of money, though some turned out to be surprisingly good, but those that turned out good were accidents.

2. Spending too much on clothing – When I lived in the United Kingdon, I bought most of my clothes and shoes in the more expensive shops like lk bennet, hobbs etc, when in actual fact I could have saved considerably by shopping in the cheap shops such as Primark. When I went to visit London recently, I rediscovered Primark and I wished that I had shopped here during my student days and early working career. There isn’t always a difference between cheap and expensive clothes and I think your basics should come from cheaper shops and then as your sense of style develops and you can ascertain what items of clothing you can invest in, then you can add things slowly from more expensive stores as long as it is within your budget. My advice now would be always look for the cheapest clothes – you can still look just as great and at the end of the day all clothes wear out and will be thrown out. I also spent too much of my budget on clothes, when the recommended amount to spend is about 3-4% of income – I think I spent something like 50% or more of my income.

3. Not using my credit card wisely – by this I mean that when I saw that I had available credit on my card, I just used it to shop which was a big mistake cause credit should only be used for investment spending (business, car etc) and not consumption spending. As a result of this, I have credit card debt with nothing to show for it.

4. Not having a budget – I think not managing your money/spending closely and making budget can be very dangerous because you can easily spend lots of money without realising and that happened to me on a couple of occasions where I spent a shocking amount of money just going out and about. As long as there is money in your account and your carrying out a card, you need to have a budget and monitor things very carefully. Try as much as possible to monitor your money daily.

5. Not Investing – the reason that this is a spending mistake is that by not investing or locking my money away, I left it available to spend. The reason that I did not invest earlier is that I told myself “cash is king” and I wanted to first save up a good amount of cash. The problem with this is that its like telling myself that I can keep chocolates and not eat them  – its just too difficult to resist this temptation to spend.

This week I made a payment on my credit card – not part of the minimum balance but a payment that will go directly into reducing my balance. The goal is to eventually get my credit card balance to be not more than 10% of my annual income.

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