Debt Management in South Africa is a trending topic amongst consumers. With consumer debt at all-time highs, reaching approximately R1.9 trillion, the need for people to have a better understanding of debt management is crucial.
Before diving into our list of must-know debt management tips, it’s vital that you understand just why debt management is so important.
With nearly 25 million South African citizens currently in some form of financial debt, it’s never been more critical for consumers to understand the best ways to manage their finances.
It’s a daunting task, but when you understand the importance of debt management, you’ll better understand why it’s so crucial for your financial health and how to manage your finances better.
Debt management is essential because it helps you to:
Only once you understand all these essential facts can you begin to take the necessary steps to protect your financial wellbeing as well as protect your financial future.
Debt is a huge problem for South Africans. It has a significant impact on the economy, and the most vulnerable people are hit the hardest. That being said, there are things that every South African can do to help themselves and others.
Here are seven debt management tips that every South African needs to know:
This may be the most rudimentary, yet most important step on this list. Understanding just how much you actually owe to each of your creditors is an absolute must when trying to get your debt under control. You need to know not only whom you owe and how much, but what the terms and conditions of your loan/credit line are because you may end up owing quite a bit more than you originally thought in the long run, thanks to interest charges.
The next step is to decide which debts you want to pay off first. This is a decision that you will need to make on a case-by-case basis.
For example, if you have a smaller debt with a higher interest rate, you’ll want to consider paying that off before paying off a long-term debt such as a mortgage loan. By doing so, you’ll be able to save money on interest payments and save yourself from the stress of having to pay for a higher interest rate.
When deciding which debt to pay off first, you’ll want to make sure you consider any overdue debts. If you have any overdue amounts, it’s imperative you pay these off first.
Otherwise, you’ll find yourself in a situation where you must pay interest charges to the collection agency, or even worse you end up losing a valuable asset, like your car.
Once you know whom you owe and how much, it’s time to create a monthly bill payment calendar. This will include all of your debts and all your regular monthly expenses like food, rent, etc.
You want to write down what’s due, how much and on what day you need to pay it. Doing so will help you to stay on top of your payments and avoid any late fees, extra interest charges, or missed debt repayments.
With your calendar complete, you want to make sure you are regularly reviewing it to ensure that you are paying each of your bills on time. If you miss a payment, it’s essential that you call your creditors and let them know.
By doing so, you could avoid fines and late fees, and you may also avoid any negative consequences with your credit rating if it’s not a reoccurring issue.
When you’re making your payments each month, it’s crucial that you make the minimum payment at the very least. If you don’t, you are subjecting yourself to fees and fines that could negatively affect your financial wellbeing.
Sometimes debt can simply be overwhelming. If you’re struggling to make minimum payments or you can’t seem to stick to your spending plan, then you may need help managing your debt.
It’s crucial that you understand that asking for help isn’t a negative thing and that it’s actually an opportunity to get your finances back on track.
If you’re struggling with debt management, then debt review can help. Debt review is a service where you work with a debt counsellor, and they help you with:
If you or a loved one need help managing debt, then contact us today for more information on how our debt review services can help.
Find out if you’re eligible to reduce your debt and protect your belongings.
Disclaimer: This website and any information herein is not intended to be, nor does it constitute, financial, tax, legal, investment, credit, or other advice. Before making any decision or taking any action regarding your finances, you should consult a qualified professional directly.