Feeling broke? It’s that time of the year. Holidays, celebrations and lots of shopping. The Covid-19 pandemic has pushed many consumers to shop online to avoid physical stores. Black Friday has come and gone and many have spent and possibly over-spent on the hundreds of available deals. With the festive season right around the corner, consumers need to plan for the upcoming costs.

Evaluate Your Current Financial Position

Over-spending, and having less money in your account than you thought you would, can leave you feeling stressed. If you find yourself in this position, here’s what you should do.

• Check your current balance after all amounts have been deducted
• Make a list of all necessities that you need to buy before your next pay day
• Limit spending money on luxurious or unnecessary items
• Make a strict daily / weekly budget for the next few weeks
• Complete a weekly audit of your budget to see how you’ve performed
• Try not to miss any monthly payments such as rent, debt repayments, contracts, medical aid, subscriptions etc.

The only way to prevent running out of money or using more debt is to be disciplined. Focus on getting out of your current situation. Set yourself achievable spending goals.

Try Avoid Using More Debt

An easy fix to running out of money is to take a loan or use a credit card. It might seem simple, but the use of debt can be costly. Sometimes debt is unavoidable, but large amounts of debt are used on non-essential spending. Try force a budget that allows you to use the cash that you have earned.

Using debt can quickly become a habit. The ease of getting loans or using credit cards and overdrafts can result in a debt cycle. A debt cycle occurs when you use debt each and every month as soon as your money runs out. Payday loans and credit cards are used until you get paid again.

If you find yourself using new debts to pay off old debts, you might be in some financial trouble. Very soon your debt level might become out of control.

How Can You Keep Up To Date With Debt Repayments?

Missing debt repayments can be a scary thing. Getting calls, SMS’s and emails from your credit providers can further add to the stress. We have all heard of stories of creditors coming to someone’s place of work. Vehicles can be repossessed and homes can be sold on auctions. These are all consequences of missing too many debt repayments.

Make sure that you include all debt repayments in your monthly budget. These should form part of your fixed monthly expenses. If you have a large credit card or overdraft balance, try to pay more into these accounts. The mandatory monthly installment will usually only cover the interest and fees of these accounts. Paying more will reduce the outstanding balances.

Perhaps You Are Over-Indebted?

If your income is not enough to cover all living expenses and debt repayments in a month are probably over-indebted. This is a common household circumstance in South Africa.

Over-indebted individuals are urged to speak to a debt counsellor for help. A debt counsellor can do an assessment and determine if their solution is able to assist. Debt counselling helps consumers by reducing the monthly debt repayments and interest rates.

So, not only does your debt become more affordable, but you are able to save possibly tens of thousands of rands in interest. Vantage Debt Management has helped thousands of families to better manage their debt. Give us a call today to see how we could you.