With every new year comes a fresh start in both a personal and financial capacity. Needless to say, 2023 was a challenging financial year and pushed many South Africans to their limits. However, with 2024 almost here, it’s time to aim for a fresher and better start. 

Let’s Take Look At What Happened In 2023

For many of us, it is tough to look back on difficult years, such as 2023. Still, taking a moment to think about it can help us understand the journey we’ve been on, the challenges we faced, and the lessons we learned along the way.

• Food Prices Skyrocketed
• Continuous Loadshedding Affected Us All
• Inflation Kept On Rising
• Increased Interest Rates
• Increasing Petrol Prices
• Low Economic Growth
• Rising Municipal Tariffs 
• Changes In The Rand Exchange Rate

Assess Your Personal Budget

Every new year means a fresh budget. Our advice is to reassess your budget often and trim excess and luxurious expenses. Crucially, a monthly budget review is essential. If you overspend, take charge right away. Overspending each month limits your chances to save for the now and the future. We know finding the ideal budget ratio is tough. Surprisingly, the widely favoured method is the 50/30/20 budget ratio, known for its effectiveness.

Focus On Paying Your Debt Each Month, On Time!

Many South African consumers are finding it tough to cover their basic expenses, and that’s leading to more and more debt. If you’re borrowing money from one credit provider to pay off another, it’s likely making your situation worse.

Keeping a good credit score is super important. Make sure you pay back what you owe on time and in full every month. If you’ve missed payments, try to catch up in the next 3-4 months.

If you’ve got a bonus coming in, think about using some of it to pay off expensive debts like payday loans, personal loans, or credit card debt. This can help cut down on extra fees and interest, and maybe even leave you with some extra cash. And if there are any defaults or judgments against you, try to clear those off your record as soon as you can.

Assess Your Current Savings And Investment Plan

In many cases, individuals and families can forget to assess their current savings and investment plan. Subsequently, each year you will need to assess your current savings and investment plan. Moreover, during this assessment to look at the following:

• Are You Putting Away Enough? – If you feel like you aren’t saving enough money each month, consider revisiting your monthly budget, cut some unnecessary expenses and subscriptions you no longer need or use. 
• Assess Annual Performance: Assess your annual performance of your savings and investments. If you are not satisfied with your overall performance, shop around and find the best interest rate you can. This will allow your money to grow stronger with compound interest. 
• Assess Your Risk: With each new year, assess your risk to ensure you are covered. This avoids unexpected out of pocket expenses if something is damaged due to an unexpected event.

Are Your Risks Covered?

As you expand your asset portfolio and personal growth, safeguarding against these risks becomes crucial. Adequate coverage in unforeseen circumstances guarantees that neither you nor your family will face out-of-pocket expenses. Looking ahead to the new year, it’s wise to consider the following insurance options:

• Comprehensive Car Insurance
• Home & Contents Insurance
• Life Insurance
• Medical Aid
• Hospital Plans

If Your Repayments Are Too High, Consider Consolidating Your Debt!

If your monthly repayments feel overwhelming, exploring debt consolidation could be a good move. In South Africa, there are two main options:

• Consolidation Loan – This is essentially a large personal loan that is used to settle smaller debts. After which, you are left with just one monthly repayment and one loan. Consolidations loans are effective but do have strict qualification criteria due to their size and risk factor. Consumers should be up to date with all payments, have the appropriate affordability and have a high credit score to qualify.
• Debt Counselling – This is a solution where a debt counsellor would formally negotiate with your creditors. Monthly instalments are consolidated into one, lower monthly debt repayment. Interest rates are also reduced making the debt more affordable to repay. Consumers need to be over-indebted, can be in arrears and have a low credit score.

If you are seeking assistance regarding your debt or looking for some advice and tips, contact us. Vantage provides a free financial assessment in order to better understand your situation.