Johannesburg - If you’ve got got any of your annual bonus left after a few weeks of festive-season wallet bashing, stop and think before you spend any more.
This is the warning from the National Credit Regulator (NCR), who said that nearly half of South Africa’s 20 million credit active consumers were battling to manage their debt.
And with a combination of a national petrol price increase and e-tolls for many Gauteng motorists, there is even more of a need to tighten the belt as 2014 advances.
“During this time of the year consumers tend to over-indulge and spend more than usual and, as a consequence of this, many tend to get themselves deeper into debt to make merry,” said the NCR’s chief operating officer, Obed Tongoane.
Luis Levy, the managing director of Efficient Group, said: “From our perspective, we’ve seen the consumer under pressure from many sides. You’ve got e-tolling on the one side and inflation and the petrol price increase on the other side.”
He said consumers should pay off debt and look to put money into savings wherever possible, a suggestion echoed by NCR chief executive Nomsa Motshegare.
“Often debt accumulates with smaller purchases, which on their own don’t amount to much,” Motshegare said.
“However, when they are all added together they make a huge dent in one’s finances.”
Levy predicted interest rates around the world could increase, which would hurt the pockets of borrowers, but improve the situations of those who had saved money.
“A lot of that doesn’t bode well for the consumer,” Levy said.
TIPS TO MANAGE YOUR DEBT
From the National Credit Regulator
- Be proactive and double up on your regular payments such as mortgage or rent, lights and water.
That way you will be able to afford unusual expenses such as school fees and uniforms.
- Prioritise your home loan and rent.
- Shop around for cheaper options.
- Avoid unnecessary credit and the “buy now pay later” adverts as this only delays the inevitable.
- If you do borrow money, make sure you borrow only for what is strictly necessary, and ensure that you can afford the repayments.
- Entertain at home. Ask guests to bring something for the meal so you share the costs of your holiday entertainment.
- Use your bonus to reduce your debt burden by paying off existing loans. By spending wisely you can reap the benefits later.
- Keep track of your spending by either jotting down the details of your outgoings or keeping the receipts of all your spending. - The Star