What to do with your ‘little bit extra’?
January is just around the corner and it can be a very long month if you do not consider using your ‘little bit extra’ wisely.
Matthys Potgieter, spokesperson and debt expert at DebtSafe suggested making wise choices when you receive your ‘little bit extra’ this year.
This time last year, Matthys said the number of consumers that were struggling to keep up with their debt repayments was increasing by the minute.
“And, as a result of this, you see people with impaired credit records as well as major financial (and in some cases, legal) problems,” he added.
He highlighted that you can either be a spender, a saver or a user, and asked which one you would rather be.
• The risky spender
It’s always fun to do a bit of splurging but, as you know, life is expensive and economic times are currently tough for South Africans. DebtSafe therefore recommends that you only spend a little this December (and then only if you can really afford it). Rather spend a few bucks on that holiday that you need to pay off, instead of being a risky spender by spending all your bonus money on unnecessary, expensive items.
• The cautious saver
If you are in a position to save your entire bonus or have money left from your tax refund amount (after your necessary debt payments etc.), why don’t you save it? Tuck your entire bonus or a part of your tax return into your rainy day/ emergency fund. Life happens and you never know when your ‘little bit extra’ savings may come in handy, especially when you really need it.
• The wise user
Matthys recommended using a bonus productively by paying off excessive debt. If you relate to this, there are two things that you can do:
1. You can either make use of the so-called snowball effect by paying off your smallest debt first (like a clothing account); or
2. You can use the avalanche method – where you use the money towards paying off the debt with the highest interest rate first, like your credit card.
Remember, January is just around the corner and it can be a very long month if you do not consider using your ‘little bit extra’ wisely. DebtSafe offers a debt management programme for over-indebted consumers. Get in touch with the team by sending a free SMS stating your name and INFO to 30898.
Do you perhaps have more information pertaining to this story? Email us at randfonteinherald@caxton.co.za (please remember to include your contact details in the email) or phone us on 011 693 3671.
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