When analysing clients’ budgets, debt counseling firm Octogen found that entertainment is consistently a category people tend to overspend, so it is perhaps not surprising that when interviewing 22seven users as part of the Show Your Money Who’s Boss campaign, the one commonality seems to be how much we overspend on eating out and entertainment each month. Considering that restaurant prices have increased by around 10% per annum (according to StatsSA), eating out is probably having a significant impact on your monthly expenses.
22seven convert Ashley did a little experiment and created a category for “Alcohol” so she could see just how much money was spent on going for drinks with friends, networking, or purchasing wine for the house. “I nearly died of shock to realise that I spend more money on booze than I pay my domestic worker who comes once a week. This app can reveal stuff about yourself that you never knew!”
|If you want to find out how much you are really spending on eating out or those other “invisible” costs, watch this video or download the 22seven app.|
Within a month of using the 22seven app, Stephan had canceled two recurring payments that were not making financial sense. “I also realised how much I was spending on eating out and how that could be put to much better use by investing it,” says Stephan who now transfers all additional money he makes through freelance work into the 22seven investment account. “It certainly made my spending more mindful. Instead of thinking: ‘It’s only R100, it’s not that much’, I think: ‘If I didn’t spend it and invested it for 5 or 10 years, how much would that R100 be worth then?’. I am a lot more mindful about potential value through growth that is lost when I spend today: it’s not just the current spend I am spending, but also the future growth that I’d be spending.”
For Jenny, her main overspending was on eating out, by a long shot, but she also noticed she was spending far more on clothing than she realised. “I guess because I don’t shop for clothes every month, I wasn’t realising how my spending on this category added up over time. I love that 22seven averages out your spending over a few months ‒ my brain could finally make sense of my (bad) habits.”
Camilla never knew how much she was spending on “silly stuff” like fast food and bank charges, “because 22seven categorizes the spending money so accurately that I almost fell on my back, I spent something like R700 on bank charges alone which was very unnecessary.”
And then there is the cost of data. Once Andre, another 22seven user, was able to analyse his budget, he discovered his cellphone costs were getting out of hand. “I adjusted some cellphone habits and saved money. I also saw an increase in my insurance premium and quickly phoned the company to query it. Turns out it was a mistake. The mistake would’ve gone by unnoticed if it weren’t for the app.”
Dirk, who has been using 22seven for the last two years, admits that his eating out category was really scary, especially when he receives the little “nudge” from 22seven. This is a money reminder that is created each month just to remind you that this is actually the amount of money you are spending on a category that you don’t really need, and it also reminds you how much you could be making by just investing even 10% of that amount. “The reality is that we don’t always want to know what is going on with our money, but the nudges are a nice way of doing it. It is like having a friend reminding you a bit.”