Financial health is no different to your physical health. Just as you would seek a remedy for a cold or flu, you should also seek a remedy for any negative financial symptoms they may be showing.
28 November 2012
According to the technical definition of a recession, South Africa is out the red, but the National Credit Regulator anticipates a total of 150,000 consumers to be under debt review by Christmas. We may have reverted back to our 3-6% inflation target, but to say this means we are out of the recession is not true for the average South African consumer.
On average, these figures show that South Africa has 9000 new applicants for debt counselling each month.
Luke Hirst MD of debt experts DebtBusters says ‘The contributing factor to this could be the rising number of people who have lost their jobs this year. When you do not have an income it is unlikely you can pay off your debt and in most cases the amount that people are earning is simply not enough to cover basic living expenses, let alone cover your liabilities.’
According to Stats SA, the number of people in the labour force decreased by 418 000 from 17,5 million in Q2:2009 to 17,1 million in Q3:2009. Besides rising unemployment, increases in power tariffs by a possible 35% year on year if this gets approved by the National Energy regulator of SA and higher inflation as a consequence of the 2010 – the outlook is quite gloomy.
Even though the economy had returned to growth in the third quarter, with GDP increasing by 0.9% after three quarters of contraction, this does not mean that we should go out and celebrate just yet.
Recovery is likely to be slow and Hirst advises consumers, ‘Continue to spend conservatively. Should you find yourself in debt, research the options that are available to you. Consumers should actively begin a debt repayment plan. Consult a registered debt counsellor if you have any concerns about your current financial situation.’
Hirst continues to say, ‘South Africans under debt review need to realise that they have been thrown a lifeline. By agreeing to pay a reasonable amount each month you can avoid repossession of assets and legal proceedings.’