A financial plan is your map to achieving your financial goals. These could include education for your children, building a house, starting a business or, securing an asset. The risk of not having a financial plan is that you will most likely never achieve your financial goals. Many people think that if you are under debt counselling, you don’t need a financial plan. This could not be further from the truth. If you have chosen debt counselling as a debt management solution, you most definitely need a financial plan to build a brighter future for yourself. Without a financial plan, you may find yourself back in debt because you neglected to plan for future risks. The risk of not having a financial plan as part of your debt solution can be costly.
28 November 2012
The number of unemployed applicants applying for Debt Counselling in June more than doubled compared to May, according to recent recordings at DebtBusters, a Debt Management Company.
Luke Hirst, MD of Debt Experts, DebtBusters says, ‘These findings are in line with The Quarterly Labour Force Survey published by Statistics SA in May, and are of major concern. In 2009, huge amounts of jobs were lost and Q1 of 2010 has shown a further decline of some 79,000 jobs, showing that the effects of the recession are still being passed down to too many South African households
‘Not only are South African consumers struggling with debt, but to top it off the unemployed are having to rely on UIF payments to repay their creditors, as well as for day to day living expenses.’
A consumer may only apply for Debt Counselling if there is an income and that they have something to offer the creditors. This surge in unemployed applicants leaves the consumer in a situation without options, and leaves creditors with the only option available to them – legal action. Banks in South Africa have been hit hard by rising bad debts as unemployment remains high and household finances are shaky after Africa’s largest economy exited a recession last year.
Hirst continues, ‘The current situation leaves only one measure to ease consumers’ pain. A rate cut later this month, when the MPC meets, is now absolutely necessary. ‘