3 Ways to Save the SA Indebted Candidate Homebuyer
There is debt and there is d-e-b-t. Reading the numerous media reports these past few months, it has become obvious to us all that South Africa is dealing with a serious issue of indebted citizens.
We all find ourselves in different situations in life. Perhaps you were among the (“lucky”?) ones in 2008 who received more positive bank loan application approvals than you could handle. Who knows, you might not have been very straightforward on that application and made things much more worse for yourself now.
How many consumers declare bankruptcy because their debt levels have ballooned so much, they can’t even make all the minimum monthly repayments?
Statistics from the National Credit Regulator (NCR) show an alarming level finds themselves in that position! The ranks of newly-divorced singles, bankruptcies, unexpected retrenchment or loss of employment for whatever reason have been growing.
Indebted Consumers and Life Style…
The latest numbers from the South African National Debt Mediation Association (NDMA) point to the majority of consumers struggling with debt exceeding income levels by over 30%.
Most consumers who approach the NDMA for assistance operate with a budget deficit of more than 30 percent, where debt repayments and living expenses added together exceed their net income.
The NDMA helps consumers deal with credit bureaus, assist in making payment arrangements and general advice on legal issues.
Move Away from an Indebted Situation…
Experts have noted that the following 3 simple tips stand between you as an indebted person and a debt-free person.
- Avoid using credit in their day-to-day activities,
- Reduce their outstanding debt ASAP,
- Start putting money aside today (children’s education, retirement or some rainy day fund).
Time to Save is now…
While we are certain that your financial advisor or private banker will be able to dedicate hours to this topic, you can start today by automatically transferring 10-15% of your monthly salary deposit into your savings account. Start by paying yourself first!
One rule of thumb my father always told me is, “If you cannot pay for it right now with the money you have in your bank account, you should not be buying it. If you do have to, make sure you double-triple check when you do!”