January is a tough enough month financially as it is. Now, throw the cost of child education into the mix. Many companies pay their staff early in December as they leave for vacation. This means employees wait for five to six weeks before their next pay date in January. On top of this, December can be expensive due to festive season spending and preparation.

School Fees Have Become Really Expensive For The Average South African

As reported by a 2020 article on BusinessTech website:

“For this year, your monthly costs for school will be around R3,500 for public school and R8,500 for private school, said Marius Pretorius, proposition manager at Old Mutual.

“This may be a significant chunk of your monthly budget and excludes any additional costs like uniforms, stationery, extramural activities, sports or club fees and extra tuition.”

Although the above fees are recorded for middle-class South Africans, even a fraction of this monthly cost can be an overwhelmingly high budget expense. With the cost of educating your child increasing, other necessary expenses such as rent, utilities, groceries etc. become more difficult to afford.

Many Will Resort To Using Debt To Cover Increasing Living Costs

Many South Africans are left with little choice but to use debt each month. Struggling consumers will resort to using personal loans, payday loans, credit cards, store cards and overdrafts to make it through the month.

Unfortunately, there has been an uptick in consumers missing these debt repayments. BusinessInsider reports:

The Q3 2020 South Africa Industry Insights Report shows that 12% of credit cards and 22% of personal loans extended by banks were now also overdue three or more payments, which is classified as a “serious delinquency”. Almost a third of non-bank personal loans were behind on three or more payments.

Controlling Debt Expenditure Could Be The Answer

If over 50% of your net income should be going towards debt repayments each month, you may have an affordability problem. Vantage Debt Management has found that high debt repayments usually lead to on of two scenarios:

1. Using more debt to pay off existing debt or necessary living expenses
2. Missing debt repayments as there is not enough money to pay for debt and basic living costs

If you have adopted any of the above actions, you may be over-indebted. The best course of action would be to speak to a registered debt counsellor for advice. A debt counsellor could assist by lowering monthly debt repayment as well as negotiating down your high interest rates.

The aim is to get you debt free in a quick and affordable way, while allowing you to afford basic living expenses. Give us a call today, or request a free callback to see if we could assist you before your next pay date.

{Sources: BusinessInsiderSA; BusinessTech}