2011 Predictions: Maya Fisher-French, M&G Smart Money

By Staff Writer

2011 is going to be another tough year for households, and we are going to have to continue to tighten our belts.

Although the recession is behind us there are no indications of a strong recovery. People who have lost jobs will find it difficult to find new employment. Small businesses will find it difficult to expand this year.

Most people remain heavily indebted and despite consumers paying off debt and not taking on new credit last year, our debt levels remain historically very high at around 78% of household income. This figure is confirmed by reports from the credit bureaux that every second credit active South African, is struggling to repay their debts.

However optimism does seem to be returning, people are borrowing more to buy homes and cars and even credit card debt has started to pick up. There is a sense that the worst is over and after two years of financial tightening, people just want to get back to spending.

So it is important not to get carried away and to rather resist taking on new debt, especially as the economic recovery is expected to remain subdued. There could be further economic shocks, especially if the rand takes a serious tumble resulting in much higher inflation and therefore higher interest rates.

Consumers who use this year to consolidate their finances by sticking to their budgets and paying off their debts will find 2012 a much better year.

Maya writes for the Mail & Guardian, you can read some of her questions and answers here.

Recent Articles

Featured Do you still need credit life cover when you have life cover?

When you take out credit, your creditors will require you to pay back what you owe no matter what your circumstances are. This is why they have credit life cover built into their loans to ensure you are still able to pay off your debt, should any unfortunate event occur. 

 

Read more

Are you ready to just tap and go when you pay?

The integration of the tap and go system has revolutionised the way consumers make payments. Instead of having to insert or swipe your card, you are now able to simply tap and have the payment registered almost instantaneously. But how safe is this?

Read more

Debt consolidation – Explained

Dealing with debt can be daunting. If you’re struggling to keep track of which store account to pay next and weighing up which credit card is more important to settle first, you may have considered debt consolation. At Justmoney, we’ve decided to get down to the basics and explain what this entails and what impact you can anticipate on your credit score.  

Read more

3 Vehicle financing options compared – which is cheaper?

Buying a car is a considered a milestone, both in life and financially. Unless you’re able to fork out the cash, many opt for financing. But often the excitement to drive it off the showroom floor overshadows the need to check if you’re choosing the most-suited option. To help you make the best-informed decision we compare available vehicle financing structures in South Africa.

Read more

Sign Up

To our weekly newsletter for advice you can bank on

Deals

Save with 10X investments

Price: Free
When: Until 30 June
Where: Online

Sanlam Cumulus Investment Plan Limited Offer

Price: From R2,500
When: Limited Period
Where: Nationwide

Roman's Pizza Special - Any Single Large Pizza

Price: R69.90
When: Until 31 July
Where: Nationwide