Debt happens to everyone. Consumers get into debt due to unforeseen circumstances such as disability, retrenchment, divorce or due to conspicuous consumption and poor money management. Most of the time however, consumers get into debt because of the latter. They fail to draw up a monthly budget and stick to it.
28 November 2012
2010 has arrived. The holidays are over but the bills arriving are not.
Luke Hirst, MD of debt experts DebtBusters anticipates ‘Thousands of over -indebted consumers to be flocking to debt counsellors in January as the after affects of the holiday season kick in. Failure to deal with debt early can only make things worse as the bills continue to pour in.’
Reckless Christmas spending will cause serious financial stress in the weeks to come and consumers need to start formulating their strategy now.
Hirst says, ‘Develop a plan. Budgeting is never enjoyable, but it’s the only way to get an idea of how much money you have coming in, where your money is going to, and how much you’ll need monthly to pay off your debt by a certain date.’
South Africans are warned to step cautiously into this New Year. The recession may be over but economic recovery is likely to be slow. Uncertainties around interest rates, electricity hikes, food and petrol prices only reiterate the year ahead for the average South African consumer.
While The effects of the recession in Britain prove positive as they experience the highest saving rate ever recorded in UK history, this may not be the case in South Africa.
Hirst continues to say, ‘Consumers need to realise that there are options out there and before losing control of the situation need to seek help. It may seem easier to ignore your financial situation, but incurring more debt can only make things worse. You can be excluded from qualifying for a loan in the future and even from finding employment.’