Guiding consumers since 2009

Take back your financial freedom

By Staff Writer

 

Many South Africans will celebrate freedom day tomorrow (27 April) while shackled to their debt.
This is according to Sylvia Walker, market development manager at Old Mutual. She added that millions of South Africans who earn good money battle with short-term debt.

The Old Mutual Savings and Investment Monitor found that many breadwinners see debt as unavoidable and this perception is reinforced by rising expenses like transport, food and electricity.
 
Shepherd  Silayi,a debt counselor consultant at Credit Matters, said many people are dependent on loans just to sustain their day-to-day needs.
“Short term loans are appealing because they have lower interest rates but it can become problematic for people who end up taking a loan to pay off another loan,” said Silayi.
 
Walker added that while we must definitely celebrate our democratic freedom, Freedom Day is also an important opportunity to make sure that people know their financial rights and assert them, while also exercising responsibility over their own financial freedom.
 
“South Africa’s consumer protection laws are very robust, but many consumers simply aren't aware of the extent of that protection. It’s important that people firstly, know their rights and recourse and secondly, feel empowered to take control of their money,” said Walker.
 
Born-free generation’s debt
 
Many of those who grew up free from oppression find themselves enslaved by “now-ism” (an access to easy credit that drives a buy-now-and-pay-later mood). 
“It has resulted in a debt-to-income ratio of nearly 80%. In other words, for every rand South Africans spend, 80 cents goes toward servicing their debt,” said Walker.
 
Silayi added that a lot of debt made by the younger generation is driven by a need to live a certain lifestyle. As a result many of Credit Matters’ younger clients need help consolidating debt caused by loans, credit cards and clothing store accounts.
 
Don’t drown in debt
 
To live a debt-free life requires serious action and it starts with drawing up a budget. According to Walker many South Africans simply don’t know exactly how much they earn or how much they spend. You must establish how much money comes into your account each month and where it goes.
 
She also recommends paying off your most expensive debt first. These include shop cards that charge the highest interest rates. “Once you have cleared your debts and are operating on a cash basis, you can start thinking about investing your money for important goals, making your money work for you, instead of you working for your creditors,” said Walker.

Recent Articles

Featured New homeowner? Be aware of these extra expenses

You’ve overcome all the hurdles of buying a home. You’ve managed to pay your deposit and your closing payments, and now you’re a proud title deed holder. However, there are other expenses waiting around the corner. Are you prepared?

Your biggest credit conundrums – answered

Understanding your credit health is one of the most important factors in managing your finances. This is because it gives you insight into your debt, your borrowing ability, and your financial history. While many understand this, there are still many questions on how to do just that.

Avoid debt collectors, choose debt counselling

There are two things you can do when you are struggling to pay your debt. You can either let your creditors hand your debt over to debt collectors – or you can let debt counsellors help you deal with your debt.

Retail notes: easy investment option for new investors

Being a newbie in the world of investing can be challenging because you don’t know where and how to invest. With so many investment options, you could easily be befuddled. Justmoney looks at how retail notes can help you cut your teeth in the world of investing.   

Deals

Translux Student Discount

Price: Depends on destination
When: Daily
Where: Nationwide

Zimbali Senior Citizens Discount

Price: From R1342.00
When: Until 14 December 2019
Where: KwaZulu Natal

Free meal for kids at Mozambik Restaurant

Price: Free
When: Until 15 November 2019
Where: Johannesburg, Durban, Pretoria