A young mining engineering graduate, Oratile Sono, a native from the outskirts of Brits in Modikwe Village, compiled a very interesting list in an effort to help individuals with their spending habits and how to avoid the silly financial mistakes that need avoiding at all costs.\r\n\u201cI am not trying to tell you how to spend your money\u201d, said Oratile in a private (shared amongst friends) Facebook post on Tuesday.\r\nIn South Africa, people who are in debt are increasingly outrageous, and employed individuals are made to believe they can afford expensive and unnecessary items. In truth, nobody wants to be told how to spend their hard-earned money, with Sono having said that, the idea is to guide you to make wise decisions.\r\n\r\n\r\n\r\nMost, and both unemployed and employed, People resort to aMashonisa when things get tougher, and end up repaying endless interests. The Mashonisa are legal and within the law, but any unlawful acts like confiscating \u2018IDs\u2019 and\/or \u2018banking cards\u2019 should be reported instantly. The young mining engineer graduate noted down the list of financial errors to be avoided.\r\n1. Cellphone value shouldn't be higher than your monthly salary\/income\r\nIn this lifetime, we all want the finer things in life, including the luxurious and expensive phones of our time with innovative technologies for convenience use. It is unfortunate that most people purchase items they can\u2019t afford.\r\n\r\nAn individual who earns R2 000 a month, cannot afford to purchase an item worth more than their salary\/income.\u00a0 It\u2019s a bad investment \u2013 Rather consider saving as little as possible and find a cheaper item with the same features as of the item you need \u2013 if you feel like you are settling for less, it is most probably the case of self-inflicting yourself to overspend.\r\n\r\nIf you are obliged to pay small monthly payments of a cellphone that\u2019s higher in value than your income, that doesn\u2019t necessarily mean that you can afford the item, because if you did, you would\u2019ve paid it in cash without hurting your balance (considering your monthly spend). Yes, paying smaller monthly fees, may give you a false illusion of affordability, eventually, you find yourself adding more obligations resulting forever in unpaid debt leading to bad records.\r\n2. You shouldn\u2019t pay a car for more than 4 years\r\nThe purchase of a vehicle should smartly be calculated considering why is there a need for a car.\r\n\r\n \tIs the car going to be used for business, going to work, for social visits or all the mentioned?\r\n \tAre you financially stable, and will you be able to meet your monthly obligations?\r\n \tIs the car\u2019s value more than your annual salary?\r\n\r\nSometimes we find young individuals purchasing expensive luxurious cars unnecessarily \u2013 however, for as long as you can afford all the \u2018nicer things\u2019 in life considering all other aspects such as investing, you are more than welcome to spend however you wish.\r\n\r\nIf you need a car to travel to work and you find it will be most helpful for your convenience and be able to handle life easier, I would suggest paying a huge amount of a \u2019deposit\u2019 for the purchase of the car, scratching out at least a year or two of your monthly payments.\r\n\r\n\r\n\r\nYou can also consider a second-hand car. A second-hand car doesn\u2019t necessarily mean it\u2019s a \u2018skorokoro\u2019, it only means someone else used it before and they are no longer interested in the car. Second cars are cheaper and affordable. With R100 000 you are most likely to find a fresh car that you can drive for as long as 5 more years.\r\n\r\nIf the car is more than your annual salary, you are opening a hole you might not be able to close, and it will definitely get bigger.\r\n\r\nConsider earning R25 000 per month, annually that\u2019s R300 000 annually, consider purchasing a car that\u2019s 50% or less than your annual salary to avoid unforeseen circumstances. Consider Life Insurance or Debt Protection at all times when you have a lot of debts. However, even when you are not in debt, life insurance is very vital, especially when you are a family man\/woman or are a breadwinner and\/or have dependents.\r\n3. The value of your car should be equal or less than your annual salary total\r\nTo be on a safe side, should you consider purchasing a car that\u2019s equal or less than your annual salary in total \u2013 ensure that you pay a hefty deposit and pay it off in less than 4 years.\u00a0 As mentioned above, I prefer 50% or less of your annual salary, this will open a room to save and pay it off sooner resulting in a strong credit score.\r\n4. Never finance your car via residual \/Balloon payment\r\nThis is a viable solution especially when you are low in cash at the point of purchase \u2013 however, this can bite back. A balloon payment is a portion of that\u2019s only payable at the end of the loan agreement Imagine a balloon payment of R50 000 payable at the end of a 5-year loan agreement, which could be about 20% \u2013 35% of the selling price.\r\n\r\n\r\n\r\nPeople tend to forget Balloon Payments, and when the time comes to pay, one just has to- and you don\u2019t want to find yourself cornered. Most people finance their cars through WesBank, and what it does is it sends notifications 90 days before the end of the contract to remind you of the outstanding balance.\r\n\r\nYou might find yourself refinancing your loan, leading to more obligations.\r\n5. You shouldn't be paying a home loan for more than 10 years\r\nThis is a great investment, and it is better to start early in life at your 20\u2019s to finish it off nearer or early 30\u2019s to fully enjoy the benefits of having a house at an early age. It is very advisable not to pay a home loan for more than 10 years. You can do so by paying extra cash into your bond account, and it won\u2019t be easy but definitely doable.\r\n\r\nA lump sum every now and then is advisable; a bond may typically take 20 years, tone it down and set a date to pay off your bond within 10 years.\r\n6. No to clothing accounts\r\nAre you In need of a scissor? I have plenty but do not ask me what it is that I use them for; I don\u2019t mind borrowing you one to start literally cutting your clothing cards. Pay off all your clothing accounts and never look back.\r\n\r\nIf you do not have clothing accounts, then that\u2019s great. A clothing account is like a debt that you can\u2019t rid of.\r\n7. No to furniture debt\r\nThe same vehicle that delivered your furniture may come to collect them back due to bad repayments. If you were to purchase furniture, ensure you pay it in cash at all-time no matter the cost. It is important to consider\r\n8. No to credit card\r\nYes, a credit card can be very helpful, however, Oratile wants to shine the light on young South Africa who overspends the money they don\u2019t have. I can\u2019t find any joy in spending money that isn\u2019t mine as it has to be repaid no matter what.\r\n\r\nYou don\u2019t need a credit card to live a better life, you need to bank better and make better wiser decisions. Say NO TO CREDIT CARDS and YES TO INVESTMENTS.\r\n9. You shouldn't spend on entertainment in a single what you make in a single day work\r\nThis is one of the most interesting facts which I personally never considered. So here, when you find yourself making R250 a day, do not find yourself spending over R250 on entertainment, but you can spend that much and more on things most important to you.\r\n\r\n\r\n\r\nWe still have young individuals who work odd jobs, making a couple of thousands in months and spending it all within 3 days just after getting paid.\r\n10. You should only buy an item if you are going to use it for more than 10 times.\r\nConsider reusable items and or those that will last you a while when making purchases. Don\u2019t feel pressured even when you want to purchase an item that can only be used once, you may when necessary and\/or when you can truly afford it, and one needs to truly understand the meaning of affordability.\r\n11. Don't spend first and invest after.\r\nIt works contrariwise - invest first, then spend, ensure your future is secured financially before you unintentionally to overspend. Investments provide financial security and income with the interest\/cash earned from saving.