Tips and advice in managing your finances

Tips and advice in managing your finances

Do not ignore your debt

  • Resolve to deal with your indebtedness using the means at your disposal
  • Get in touch with your credit providers and explain your situation. Remember credit providers would rather receive small payments from you than none, so negotiate lower instalments.
  • Avoid dealing with your financial issues in secrecy or through denial: make your family aware of your situation.

Prioritise and pay your debt

  • Formulate a budget representing all your income and monthly expenses.
  • First pay the bills on essentials like housing, electricity and insurance.
  • After essentials pay your day to day expenses like travel and food.
  • Give priority to those debts that carry the highest interest and then the rest in descending order.
  • Seek expert advice before selling anything.

Avoid borrowing to pay off debt

  • Avoid using credit cards to pay for existing debt at all costs.
  • Credit only creates more debt, so don’t take on any extra credit cards or store cards.
  • If you get retrenched, use the retrenchment package to pay off debt, the effects of a bad credit record lasts longer than the short-term financial inconvenience.

Cut down on your expenses

  • Eliminate non-essential items. Short-term discipline will ensure long-term financial stability for you and your family.
  • Make a list differentiating between your genuine needs and things you merely want – and stick to it.
  • It’s a mistake to cancel your car and household insurance policies.
  • Where possible, avoid paying others to do things that you can do yourself.
  • Cut down on unnecessary expenses and luxuries.

Never skip your repayments

  • Continue making payments, even when you are under debt counselling.
  • Pay as much as you can to prevent debt from escalating.
  • If you do not pay, you could lose your house or car.

Prioritise your home loan repayment

  • Never skip a home loan payment, even when you are under debt counselling.
  • Pay as much as you can
  • Be careful – you can use your house.

Always act on a letter of demand.

  • When you receive a letter of demand, don’t ignore it – respond to it.
  • Contact your credit providers and explain your situation. Remember credit providers would rather receive some payments than none.
  • Don’t be bullies into making promises you can’t fulfil, you still have rights use them.

Act now, do not wait until it’s too late!

  • If you cannot afford your monthly repayments approach your credit providers and negotiate lower payments.
  • If this fails, contact The National Debt review Center.
  • Debt Counsellors help consumers to manage and restructure debt. (visit https://www.ndrc.org.za for more information)
  • Debt Counselling is not a payment holiday. If you do not pay your debts whilst under debt counselling, credit providers will repossess your goods.

Seek help from a debt counsellor.

  • If you cannot afford your monthly repayments approach your credit providers and negotiate lower payments.
  • We help consumers with this regard and to manage the finances effectively.

Start saving today

  • Plan to save money every month.
  • With the money you put aside, create an emergency fund for unforeseen circumstances, which may arise.
  • Be consistent and accurate with your budget and keep what is left over.
  • Cut down on unnecessary expenses and luxuries.

Understand the Cooling off period

  • In terms of the NCA, a cooling off period only relates to credit agreements signed at the premises other than that of the credit provider. This might be at your home for instance. The cooling off period is valid for five business days. Often, credit agreements are signed at the credit provider’s premises. So, don’t sign until you are sure.

Understand your credit insurance

  • If there is, familiarise yourself with the terms of the insurance to avoid surprises when you most need the insurance. It is advisable to take out credit insurance.

Never sign a blank credit agreement as you will not have control over other information that can be added after you sign.