After the petrol hike and the proposed higher electricity costs looming, your living expenses will be more expensive. You will need to address this now or you will find yourself in trouble within 6 months.
1. Have a contingency fund. Before you start spending your salary, put a portion of it away for a rainy day.
2. Take your own lunch to work.
3. Use electricity sparingly and switch off appliances. Go to Eskom’s website for more ideas about saving electricity.
4. Budget for groceries and keep record of what you buy.
5. Do not over extend your credit card – it is the most expensive debt next to personal loans.
6. Do not borrow money when you are in trouble, go see a debt counsellor for advice.
What typically happens, is that you start overspending on your credit card or overdraft a little every month. Then you end up with the credit limit maxed out, the monthly repayments too expensive and the need to borrow cash to try and salvage the situation. Please remember, no person has ever borrowed themselves out of debt, you just worsen your situation. Some micro loans and personal loans have very high interest rates and these expensive loans might solve your problem in the short term, but will cost you a lot of money.
You need to have a serious look at your expenditure and one way of doing this is to keep track of your payments, to keep all slips and receipts for a month and write down what you bought or paid for. You will be amazed by how much is spent unnecessarily. See where you can save. Be careful of banking costs. Have a look at the report about banking costs done by Solidariteit in November 2010, including a cost comparison between al the banks.
As soon as you can not pay all your debts and living expenses, you are over extended and need to see a debt counsellor. Do not wait for a letter of demand from creditors since that already constitutes the first step of legal action. Take action now. The National Credit Act 34 of 2005 is there to ensure that consumers live before paying debt as prior to the Act implemented in 2007, you had to pay debt first and live off the remainder.
Consultation and evaluation is free of charge and you are welcome to contact me – Renée Marais (012) 330 0428 or firstname.lastname@example.org or cell phone 078 031 4264.