According to research, more people are in debt than ever before. This seems to be a similar trend across the world, whether you are in the UK, America or South Africa.
The news, which was reported by Cape Town Radio this month, says that the weak economy is “pushing people back into poverty from the middle class.” Neil Roets said, “People earning more than R15 000 per month… these people finance their goods… the vehicles they finance, their houses… they’re feeling the pinch of the sluggish economy. Prices are going up… Employees don’t get the increases and bonuses they’ve become used to…”
With this in mind, what can families in SA do to help with their dwindling finances?
Finding the right approach for YOU – Personal finance is just that – personal, and so you can’t assume a ‘one size fits all’ approach. Just because your neighbour cut down their debt by buying a certain credit card, doesn’t mean that is the best option for you as well. You really need to look into your own unique circumstances to assess what the best solution would be for you.
Consolidation – One of the first things you might consider is assessing the current debt you have. It might be an idea to shift the debt to a lower interest rate so that you don’t end up paying too much. Payday loans provider Wonga, who recently launched The Money Academy recently advise that consolidating your debt with the help of a lower interest rate credit option could be a good decision in the long run.
Getting expert help – Often, it can be wise to rope in the help of a financial advisor to assess the best options on the market, and do the correct calculations to see whether it really is the best thing for you.
Savings – Just because you are in debt, doesn’t mean you cannot save some money. Even a little each month is worthwhile and can really help when the going gets tough. Some money apps allow you to save a little each month, straight from your bank account, without you even realising that it has gone (by rounding up payments, for instance.) In fact, there are many apps that can help you save.
Cutting back – Of course you might also consider cutting down on any excess outgoings for now, while you get back on your feet. This might include television subscriptions or gym memberships that you don’t use or need, or that you can do without. You might also want to assess how much energy you use in your home. Could you invest in solar panels to cut down your electricity bill? Does this give a good ROI? Could you simply make cut backs by turning more lights off, or keeping the TV off stand-by at night? Think also about what you do as a family. Could you cut back on some sports clubs or days out, in favour of cheaper alternatives?