Michelle’s story is typical of many women: we take on looking after the household, the kids, the extended family, and the shopping – and we leave financial matters up to our partners. This is a dangerous mistake to make, warns Botha. The person most responsible for your future financial wellness is you – not your partner – and it’s your responsibility to make sure you know exactly what is going on. If you don’t know where to start, consult a financial advisor and ask them to explain exactly what documentation you need to be keeping track of. Know what is coming in and what is going out and write it all down in a spending diary.
-If you don’t have enough money to cover your current expenses, get real about your lifestyle and see what you can cut out. You’ll be amazed at the price differences in basic household goods once you start shopping around, instead of sticking to the brands you’ve always used.
-Draw up a list of your absolute essentials and stick to this. Buying on impulse or because there’s a sale on is no longer an option. You have to learn to separate your ‘needs’ from your ‘wants’. For many women, shopping is about making themselves feel better – if that’s the case, find another outlet for your stress, such as exercise.
-Review your budget regularly. If your circumstances change – for instance your bills increase, or you take a salary cut at work – adjust your budget accordingly. If your salary increases, stick to your current budget and save the difference, or use it to service debt.
- Pay off debts with the highest interest rates first and the rest in descending order. If you’re not sure what the interest rates are, contact your credit providers for more information.
- Don’t cancel important insurance policies or medical aid. Rather shop around for cheaper premiums.
- Get the existing market value of your car at least once a year and then contact your insurance company with this information to review your monthly premiums.
-Now is not the time to try and sell a property unless you are really battling to retain it. Seek expert advice before you sell.
- Should you be retrenched, inform your creditors immediately and use your retrenchment package to settle debt. “Remember that you have the right to pay off your debts earlier, and there may be a big difference between the outstanding amount and the settlement amount,” says Setou. Ask your credit provider for the settlement amount and pay this off if possible.
- You have the right to surrender and return goods for which you are no longer able to make payments, depending on the installment agreement. Approach your credit provider to discuss available options.
- Learn to let go. “There’s no point in beating yourself up about the situation; rather use that energy to find practical solutions,” says Botha. “Nobody can go back and change unwise decisions in the past, but everyone can start over now and create a financially healthy future. There is help available, so use it!”
Useful contacts:
NCR: www.ncr.org.za or call 0860 627 627
SADAG: www.sadag.co.za or call 0800 567 567 or sms 31393 for a call back.
Credit Matters: www.creditmatters.co.za or call 0861 116 197
Interface: www.interfaceexcel.co.za or call 011 326 0060
Are you in over your head>
“A consumer is over-indebted when she cannot service all her debts in a timely manner as agreed in the credit agreements,” says Setou. If you answer ‘yes’ to one or more of the following questions, seek help – the earlier you face up to your debt problem, the easier it will be to overcome.
-Do you use your credit card and overdraft facility to pay debts and buy food and other necessitiese
-Do you borrow money to pay other debts
-Do you skip on payments to some accounts in order to pay others-
-Do you miss bill payments (such as telephone and electricity) because you need to make credit repaymentsh
-Have you received letters and summonses from creditors or lawyersa
Once you’ve taken the first step, which is admitting that you need help, it’s time to take action. Consult a registered debt counselling service; and if you’re not sure where to go, contact the NCR for recommendations. Be wary of smaller, unregistered operations that demand large payments upfront and never, ever, borrow more money to pay off debt.
The R200 a month plan
“You can transform a mountain of debt, one step, one day at a time, with just R200 a month,” says Valerie Leeming of Interface. The planm
-Draw up a budget and find an area where you can save R200 a month – whether it means skipping that night out with the girls, or not buying the top you don’t really need.
-Next, draw up a spreadsheet with four columns listing your creditors, the amount you owe, your monthly instalment, and how many instalments are left on your repayments.
-Pick one of your short-term, high interest rate debts from above and pay the extra R200 into this account every month until that debt is eliminated.
-Now that R200 is available again, as well at the instalment amount you were originally paying on the debt eliminated. For example, if that amount was R300 a month, you now have R300 plus R200 available to pay into the next short-term, high interest rate debt on your list. By paying an additional R500 a month, you should be able to pay if off fairly quickly, and so the process accelerates until you are debt free – and it all started with just R200.
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