The Ten Commandments for avoiding the Debt Counsellor

By Staff Writer
1. Thou shall budget

Luke Hirst, registered debt counsellor and MD of Debtbusters says this is the first step that every household should take in a bid to curb any financial woes. "If you know how much you spend and where you spend it you are far less likely to fall behind on any payments that you may owe. If you make your budget yourself, make sure you prioritise correctly and, most importantly, stick to the budget you draw up."

2. Thou shall not drive an expensive donkey

"I can't count the number of debt counselling clients that drive cars that they cannot afford" says Hirst. Sure, it's great to drive a flashy sports car and wear designer labels, but if you are really worried about looking good in front of the neighbours, think about how silly you will look when the bank repossesses your car in the driveway while the Jones' are watching. No matter how vain you are flashy cars and labels are luxuries, not necessities. A cheaper make of vehicle will also save you on insurance costs.

3. If you have gold coins to spare, you shall invest them wisely

For most South Africans, being unable to pay their mortgage is one of their greatest fears. To vastly decrease the total cost of your home loan, pay in extra when you can in order to save on overall interest costs - over a 20 or 30 year loan, the saving can be astronomical.

4. You shall not "swipe now and pay later"

Credit cards are great when you can't find an ATM, but relying on them to provide you with cash you don't actually have can be catastrophic. "Almost every debt counselling client that walks through our doors has a number of credit cards that are accruing huge sums of interest every month" says Hirst. With credit card interest rates as high as 27%, a simple shopping spree could end up costing you in the long run if you don't pay off what you owe in full. "By all means, use a credit card, but be certain that you can pay back both the cost of the goods and the interest you'll owe on them.

5. Renting is not a sin

"South African's have a mentality that renting is a sin, but in times of rising interest rates and high food costs, the knowledge that your rent is fixed for the term of your lease is a source of great comfort." Hirst also says that people need to realise that they could probably rent the identical property they own for a sum that is substantially less than their bond repayments. On top of that, your landlord is responsible for any maintenance on the property, so think long and hard before you put your foot on that property ladder.



6. You shall not sit back and wait

"The minute you think you may be in some form of financial strife, you need to take control of the situation", says Hirst. "Contact your creditors, get hold of a debt counsellor or re-evaluate your budget before it gets too late. "At least half our clients should have contacted us several months earlier, but because they dig their heads in the sand and ignore their problems for too long they end up being in financial strife instead of nipping the problems in the bud before they escalate.

7. You shall not follow the herd

With so much financial advice available, it becomes easy to read generic solutions and tailor them to your own financial situation.

8. You shall shop around for you mortgage lender

"Most people in South African have been with their own lender so long that they have no idea what interest rate another institution might offer them on their mortgage." With products like remortgaging becoming increasingly popular, it makes little sense for people to become passive passengers in financing their home. "Approach a different lender or a broker to see whether moving your home loan might be a worthwhile option. It'll cost you in cancellation fees, but it may well save you a fortune in the long run."

9. You shall eat the food your family prepares

Everybody likes to eat out, but it's the little things that add up when you are under pressure. Eating out three times a week is not something that you should become used to, especially if you are a family of four, and curbing spending of this kind could well save you the extra money that could keep your household out of the red.

10. You shall not overpay on your insurance

You need insurance - you only need to have a car accident without cover to find out how costly being without insurance can be, but there is no reason you should be paying excessive amounts for it. With so many options available, take your time  to shop around and make use of tools like independent comparison websites to find you the best deal - the big names don't always provide the most cost effective cover.

Recent Articles

Featured Tax free savings accounts – Which offer you the best value?

This week Justmoney compares TFSA’s across the five banks mentioned to see which bank allows for the most savings potential and which is cheaper to utilise.

Read more

Are you liable for your spouse’s debt?

Marriage may signal taking on someone’s last name, family, and even traditions. But are you signing up to be liable for your spouse’s debt too? And if your life partner is made redundant or fired, will you be responsible for your spouse’s debt?

Read more

What happens to your medical aid when you move overseas?

While exploring a different country, you may rely on the built-in travel insurance that forms part of your medical aid. However, what happens when you stay for longer than a typical vacation? This week Justmoney has a look at what you should do with your medical aid if you decide to move overseas for a period of time.

Read more

How to apply for government funding for your start-up business

Starting your own business can be challenging, especially if you don’t have the capital to get it off the ground. Fortunately, there are many ways to fund a new business in South Africa. This week Justmoney found out more about these grants, how to apply for them, and what you can do to make your business stand out from the rest.

Read more

Sign Up

To our weekly newsletter for advice you can bank on


Free MBA Course

Price: Free
When: Applications close on 31 May
Where: Online

The 41 Winter Special

Price: From R170
When: Weekdays
Where: Cape Town

KFC Burger Day Special

Price: R97
When: Until 28 May
Where: Online