Financial stress is not enjoyable at any time in the year. Heading into a big spending period while already under pressure is even worse. The expectations from children, family and friends during the December and January period can be difficult to manage. Prevention is better than cure and your finances should be no different.

How do you know if you are financially stressed?

Are you lying awake at night worrying about money? Do you find it difficult to concentrate at work? Do you worry every time you need to swipe your bank card? These could be signs that you are financially stressed.

Besides the emotional triggers there are a few easy ways to see just how serious your situation is. If you do a basic budget exercise you can calculate if you are over-indebted on a monthly basis.

Here’s how how to calculate if you are over-indebted

Being over-indebted means that your income is note enough to cover all of your living expenses and debt repayments on a monthly basis. So, use a pen and paper or open an excel spreadsheet to draw up the following calculation:

Income (this should be your net income after all taxes and deductions)

Less Living Expenses (which include, rent, utilities, groceries, transport/petrol, clothing, school fees, medical aid, policies, subscriptions etc.)

Less Debt Repayments (these are all the monthly installments on home loans, vehicle finances, loans, credit cards, overdrafts, store accounts etc.)

= Positive Or Negative Balance

If the above equation leaves you with a positive balance it generally means you have money left over each month to save. This is a a great position to be in and many South Africans do not have the luxury of being able to save.

If you are left with a negative balance, and typically need to use a credit card or new loans each month to get by, you are probably over-indebted.

If I am over-indebted, what can I do about it?

Being over-indebted is a key cause of personal stress and financial worries. Luckily there are options to make things easier for you. The first step is to see if there are any items you can cut out of your budget. Focus on any luxury or unnecessary items.

If this is not possible, maybe your debt repayments are too high and need to be addressed. In this instance, you should consult a debt counsellor. At Vantage we offer a free financial assessment. We look at you credit report and budget and see how we can help.

Usually, over-indebted consumers with high debt levels would benefit from the debt counselling solution.

What is debt counselling?

Debt counselling is whereby a debt counsellor negotiates on your behalf with all of your credit providers. The aim is to reduce debt repayments and interest rates. Your installments get consolidated and you pay one affordable payment per month. Here are the benefits of the process:

• One affordable consolidated debt repayment per month
• Reduced interest rates (as low as 0%)
• Legally protected assets and accounts
• Simple payment plan
• Debt-free in a short period of time

If you would like a free financial assessment and a copy of your credit report, contact us today.