How to: stay on top when the economy is down
Don't understand why you can't get yourself out of the red digits and into the black?
We all live in a tough economy and unnecessary spending may be the cause of too much debt.
South Africa’s economy has endured a difficult few years, and there is no sign yet that conditions are improving for the better.
Don’t bite off more than you can chew because you can get a “good deal”.
Debt can turn into more debt and can become a vicious cycle you may never get out of.
Tighten the belt a little and cut back on unnecessary luxuries as a tough economy has mercy on no-one.
Nobantu Mtsweni, debt counsellor at Legal & Tax, gave tips on how you can control your spending.
Spend your money wisely in a harsh economy:
- Know your budget and stick to it.
- Avoid buying essentials like food and clothes on credit.
- Make a list of the items that you need to buy and buy only things that are on the list.
- Avoid impulse purchases.
- Avoid taking loans from anyone but a credible credit provider, such as a bank or a well known retailer, if an absolute necessity.
- Be disciplined about what you purchase on credit or with your annual bonus, rather throw your spare cash into your bond or pay off high-interest debt before buying an LCD TV or going on an expensive holiday.
- Be smart with your credit card, try and pay the full balance you owe in the first month to avoid interest charges rather than just paying the minimum instalment.
- Buy cheaper name brands like the ‘no name’ brands at supermarkets to save on groceries, you don’t need the best brand names to survive.
- Try to save money in a ‘rainy-day-fund’ instead of having to take a micro loan if, for example, you need to pay for a funeral, you lose your job, or need to pay for school fees and uniforms.
If you are already in financial trouble because you have taken on too much credit, you should take action by asking your creditors to change your repayment terms to ones that you are better to be able to match each month.
Or if you are in a little more trouble than a monthly repayment dilemma, contact a debt counsellor who can advise and help you out of your situation.
