Debt Help

July
24

Expectations VS. Reality – When life happens!

Contrary to the stigma that consumers are indebted as a result of reckless spending or borrowing, most consumers who approach DebtBusters for assistance do so as a result of unforeseen circumstances.

Many young people set huge expectations for themselves even before they’ve entered the ‘real world’. There is often a set idea of what success looks like that has been deeply entrenched during the teenage years, and the goal is to achieve this success as quickly as possible. They hope to land their dream job, fulfil personal and financial goals such as owning a car and a home, and providing for a family one day.

However, more often than not, life’s uncertainties and curveballs are thrown at us and things do not always go according to plan. This was the case for 28-year-old Thandeka* (name changed to protect her identity), who felt the financial pressure after experiencing a break up with her partner, as well as starting a new job in a more expensive area.

After Thandeka’s* break up and accepting a new career opportunity, she found herself in an arduous financial situation. Her rent had increased and her petrol consumption was higher. It became clear that it was not possible to adapt to her new lifestyle with a single cash injection after having created a life based on a dual income.

Thandeka* approached DebtBusters to apply for debt counselling, and the initial assessment showed that her changes in circumstance, as well as her increased expenses,  led to her being over-indebted. This outcome made her a fitting candidate for the process.

Thandeka* says that the debt counselling process has made life much easier for her, as it has freed up cash flow allowing her to afford her monthly living expenses, as well as ensuring that her debt obligations are met and that she is on the right track to becoming debt-free.

As part of an incentive campaign launched earlier this year, DebtBusters recently awarded Thandeka*, who was randomly drawn from a pool of qualifying clients, R50 000 off her total outstanding debt.

The R50 000 will be used to settle both Thandeka’s* retail accounts, and the remaining balance will go towards her vehicle loan. Having Thandeka’s* vehicle loan under the debt counselling agreement also means that her vehicle is legally protected throughout the process, and she will be able to get from A to B without worrying about her vehicle being repossessed.

With the injection of the R50 000 towards her debt, Thandeka* will shorten her debt counselling journey significantly, her vehicle will be paid up, and she will be able to start financially afresh and focus on her goals and aspirations.

Thandeka* aims to save as much money as she can towards advancing her career and securing her first home with a substantial deposit. She also mentioned that she doesn’t see herself taking out any further credit in the future unless it is to purchase a house.

Over-indebtedness can creep up on any consumer, and when an unexpected life event arises, our financial obligations often remain the same or can even increase. It is important for consumers to be aware that these situations can happen to anyone, and that seeking the right professional help, such as debt counselling, can be the answer if you’re committed to the end result – a Financially Free Future.

 

 

July
24

Escape the debt cycle in six steps

Borrowing money can assist you with a difficult, unforeseen emergency, but once you start relying on it for your daily survival, you’re creating a cycle that becomes increasingly harder to escape.

 How does the debt cycle work?

The debt cycle can begin when you take out a loan during an emergency – for instance, a personal loan. You may plan to pay it off before you take out any further credit.

However, life can be unpredictable – another emergency may strike or you may find your living expenses have suddenly increased and therefore you could feel the need to apply for a second loan. What harm could it do, right? You may suddenly realise the weight of your mounting debt repayments, and you might not have thought of the implications of the interest attached to your loans. This pressure may make you feel you need even faster access to money, and prompt you to apply for a credit card or overdraft facility.

In the end, you have three instalments to pay off, and you start relying on credit to help you with your daily expenses. It’s a vicious cycle, but one that can be broken.

 How do you break the debt cycle?

  1. Acknowledge your situation

The first step to getting out of a bad debt situation is acknowledging that you’re in one. Consumers are often in denial when it comes to their personal finances because they don’t want to admit that they are in a difficult situation. Be sure to discuss it with your family and consult a reputable professional.

  1. Don’t take out any more debt

When you have easy access to credit, it’s easy to fall into the debt trap. You can easily overspend because you’re counting on your credit cards and your overdraft facilities to come to your rescue when you run out of cash in the middle of the month.

Close your overdraft accounts, and cut your credit cards or hide them away. This way you’ll be more careful about spending your money because you won’t have anything to fall back on.

  1. Be realistic about your income

Your income can only afford you so much. Don’t be too ambitious and rather live within your means. Before you buy something, always ask yourself if you’ll be able to survive for the rest of the month with what’s left.

Make a consistent effort to save money so that you do not have to rely on taking out credit if a financial emergency should arise.

If your dreams are larger than what you’re earning, perhaps it is time you find ways to boost your income.

  1. Create a budget

Once you acknowledge your income, create a spending plan. This will help you map out your spending and encourage you to spend more purposefully. It will enable you to weigh your expenses against your income to see how much is left over. This process can help you spend less and have more cash available to save or pay off your debt.

  1. Compose a strategy to pay off your debt

Put together a strategy on how you plan to tackle paying off your debt. Make sure you are consistently paying your monthly repayments and try to pay more than the minimum on your instalments. You can also chat to a registered debt counsellor such as DebtBusters about prioritising which debt should be paid off first. If you come into a lump sum of money, you can also chat to DebtBusters’ debt settlement department who can facilitate the settlement process, as well as negotiate a settlement discount.

  1. Speak to a debt counsellor

If you are battling to afford your monthly living expenses because of your monthly debt obligations, it’s time to seek help rather than borrowing more money. A debt counsellor can help you devise a payment plan that will help provide the relief you need. DebtBusters can help you negotiate lower instalments and interest rates with your creditors.

 Don’t let debt imprison you. Contact our friendly consultants at info@debtbusters.co.za or call 086 999 0606 to find out how we can help you.

 

 

November
22

Don’t get carried away this Black Friday as the festive season is still to come

This week many of South Africa’s excited shoppers prepare themselves for Black Friday where they will enjoy some of the year’s best bargains and sales offered by many retailers. With Black Friday comes both temptation and responsibility. It is important that consumers do proper research and preparation beforehand so that they are less likely to fall into the trap of spending unnecessarily, and beyond their means. Consumers also need to be mindful that the festive season is just around the corner and this comes with additional expenses and temptations of its own.

The key is to make Black Friday work for you so that instead of splurging on items that you don’t really need and can’t realistically afford, you are strategic about the sales and with proper planning and thought end up saving yourself money by making smart and necessary purchasing decisions.

Here are our tips to making sure your Black Friday is a financially savvy one:

Plan beforehand

Approaching Black Friday blindly is a recipe for disaster. It is also an easy way to end up buying unnecessary items just because they are on sale, resulting in you going over budget. Write up a list of the things that you need and intend to buy, as well as the amount you are willing to spend on each item. This way you are managing your own expectations by only purchasing what you need and for what you are willing to spend.

With the festive season coming up, you can also write a list of the people you are planning to buy presents for and what you are willing to spend on each person. Then try to see if you can purchase some of these gifts on sale. You can really make Black Friday work for you by saving a significant amount of money if you go in with a set plan in place.

Set yourself a spending limit  

Before writing a list of the things that you need, set yourself an overall spending limit that you should not go over. This limit should be based on your existing budget, it should be realistic and affordable. If you find that you cannot get all the items you need without going over budget, rewrite your list in a hierarchical order of importance and only purchase the most important items up to the amount that you can afford.

Cash is king  

You should avoid buying luxury items or non-essentials on credit, as accumulating credit card debt is an easy way for your debt to start spiralling out of control. Remember that buying something on credit is a commitment that will probably last longer than the novelty of the item you have purchased. You should aim to pay cash this Black Friday to minimize any longer-term debt commitments.

With Black Friday and the festive season just around the corner, there is plenty of opportunity to plan and find the items that you need at discounted prices. If you approach Black Friday and the festive season fully prepared, you can make it a financially savvy event that will be beneficial for you.

 

 

October
25

How does your social media interaction affect your spending?

Overspending is a big problem in many households with living expenses skyrocketing and the constant pressure you feel to “keep up with the Joneses”. These pressures you are experiencing are being amplified by the increasing exposure you are getting from social media platforms. Unknowingly, family and friends influence each other to buy products through posting photos and feedback on their social media profiles.

Think about it this way, if a boy goes and stands outside a candy store window 5 times a day and watches all the other people buying candy, some or other time he will go inside and buy something. Even if he has to borrow the money, he will find a way to justify his purchase. And that is exactly what we do when we watch our friends and family several times a day on Facebook or any other social networks. What we forget is that those nice new clothes or exciting holidays come at a cost, and we may even use money we do not have. You should never feel inadequate or that you’re doing something wrong if you do not have the same things that your friends and family have.

So, how can you defeat the so called “Fear Of Missing Out” also known as “FOMO” giant? Like most things in life, knowledge is power. Most of this lifestyle pressure is psychological in nature and once you make yourself aware of it, it becomes easier to eradicate it. Once you have taken this first step, you can ask yourself the following questions and answer honestly:

  1. Is this something I really need?
  2. Do I already have something I can use?
  3. Can I find a cheaper alternative somewhere else?
  4. How will this enhance my life?

Social media is not going away. It has become an overwhelming part of our lives, for better and/or for worse. How you choose to engage with it could be the difference between a financial downward spiral and a healthy, stress-free budget. Once you master your spending, social media can be fun again!

April
15

Winter debt help tips

It’s not unusual to be feeling more and more cash-strapped as the cold weather rolls in. Winter months are generally tougher as they bring added expenses. Many pray for a miracle or a bit of divine intervention just to get by each month. If you want to keep the winter woes away you need to be focused on managing your finances very carefully. You can do this easily with a household budget. Your budget should include an amount that you put aside into a savings account. It is a well-known fact that South Africans don’t save and it is for this reason that many they find themselves getting into debt when unforeseen expenses come their way. By putting aside some cash every month, many stressful situations can be solved.

To help you save this winter, we’ve put together a short list of tips that will help you to manage your winter budget better.

Debt help tips

  • Instead of using an electric heater install a gas heater or use hot water bottles
  • Switch your geyser off during the day when you are not using it and only switch it on at night for an hour or two before you need to bath or shower. Then switch it off again.
  • Instead of sleeping with an electric blanket (which poses safety and health risks) purchase additional blankets or make use of hot water bottles.
  • Cook in bulk and freeze meals for the week. This way you save electricity and your food stretches further.

By employing a cost saving strategy as simple as the one above, you can save lots of money this winter!

For further advice or assistance with your debt, call DebtBusters on 086 999 06 06 or visit www.debtbusters.co.za, fill out the free call back form and we’ll call you back immediately.

December
15

How to Manage Debt Problems

2015 has been a tough financial year for many South Africans. We have had repo rate increases, load shedding, a drought, a weakening rand, increased food and electricity prices and a shaky economy. There is still a lot of uncertainty and financial stress as we move towards 2016. Now is a good time to work out how to manage debt problems so that you can welcome the New Year with reduced debt stress.

A sound debt management plan consists of three parts:

Creating a budget

Start by listing all your sources of income, big and small. Collect all your payslips, policy pay outs, interest pay outs, rental income etc. It’s important to know how much money you have to work with so that you don’t overspend.

Now list all of your monthly expenses, big and small. Every rand counts so look at how much you spend on groceries, toiletries, utilities, entertainment, parking, snacks etc.

Next make a list of all the credit providers you owe money to and how much you need to pay each month. You can get this information from your credit report.

Remember to allocate some of your income to an emergency savings fund. Every month put away whatever you can into a savings account that accrues interest. (This emergency fund is not to supplement your monthly expenses. Only use it for emergencies).

Throughout the year there will be expenses that don’t occur on a regular basis like school trips for children, doctor’s visits, holidays or weddings. Allow for a contingency fund for these types of expenses – they always happen.

Preparing a debt repayment plan

The best line of defence against debt is good planning. Now that you have a budget, you will have a better understanding of where your money needs to go each month.

You should aim to pay off your debt as soon as possible by paying any additional income into your accounts. By doing this, you will free up more cash for savings, investments and insurances and as such will minimise any future financial risk.

Make it your 2016 resolution to avoid taking out new debt and to pay off the debt you already have.

Sticking to your plan

Often we forget to keep track of our accounts and expenses which can lead to unnecessary spending, extra fees and unnecessary deductions.

To prevent and manage this, make sure you stick to your budget. Update your expenses daily and make a habit of reviewing and adjusting your budget it on a monthly basis.

For your debt management plan to truly work for you, it needs to become a philosophy and a lifestyle.

Learning to use the money that you have and not relying on credit requires discipline and commitment.

If you need help pulling your credit report and putting your budget and debt repayment plan together, call DebtBusters on 0869 99 0606 to speak to one of our financial consultants.

Good luck!

December
15

5 debt help tips to keep you festive

The holidays are here and as we get wrapped up in the excitement of the festivities it becomes easy to overspend, leaving you high and dry in January. Here are 5 debt help tips to help you stay financially festive.

Create a monthly budget and track your spending 

A budget is a great tool to help you manage your money. It gives you a clear idea of what you can afford and helps you to prevent spending money you don’t have. Setting up a budget can be easy but the trick to making it work is sticking to it and keeping it regularly updated. For tips on how to create your budget click here.

Don’t use debt. Avoid using your credit card or taking out loans to pay for holidays, eating out and entertainment. Find activities that are free or that you can do at home instead of having to break the bank to keep the family entertained. You can also shop around for specials or use vouchers to get discounts on activities.

Use your BONUS to settle debt

If starting a new year off with less financial stress is important to you, you should use your bonus wisely. Paying off accounts with small balances or high interest will free up extra money in your monthly budget. If you use that extra money to pay towards your remaining debt, you will be able to fast track your overall debt repayments. Paying your accounts off faster means you save money on interest.

Review your insurance policies

The festive season sees an increase in the number of break-ins, robberies and crime in general. It is important that you make sure that you have the right type and amount of risk cover, so that in the event of an incident, you don’t end up paying to replace necessary items.

Delay ‘back to school’ shopping until the January Sales come about

Before you know it, the holidays will have come and gone and it’s time to send the kids back to school. Budgets are usually tight in January and kitting kids out for school is expensive. If you plan wisely, you can beat the back to school blues! Use these debt help tips and put money aside when your December salary is paid to you and wait until the January sales hit the stores before you buy the bulk of the items.

November
22

5 signs you need debt help

There are usually several tell-tale signs that you need assistance with managing your debt. What many consumers don’t realise is that there are formal and regulated solutions put in place to help you through this tough financial situation and to guide you to becoming debt free.

Ignoring these signs will only make the problem worse. Instead, think about approaching a reputable debt counselling company that can provide legal protection and a restructured repayment plan, taking the pressure off and allowing you to enjoy life without the added stress of unmanageable debt hanging over your head.

Upon reflection, many of our clients realised that they could have prevented their financial stress if they had seen the tell-tale signs indicating that they were on a slippery slope towards becoming over-indebted. Preventing poor financial decisions and knowing when to ask for help is by far the best way to avoid an unmanageable financial situation.

Here are some of the most prominent tell-tale signs that you need assistance with managing your debt. If you can relate to one or more of these signs, it is probably time to reach out to a debt management company for help. A debt management solution, such as debt counselling, can help you take control of your finances and work towards debt freedom, giving you a fresh financial start.

1.You are taking out more credit to pay off your debt.
If you find that you are taking out more loans to help pay off existing loans, you are only creating a bigger debt hole for yourself, and it is time to seek help before the debt accumulates to a totally unmanageable point.

2.You are taking out credit to help make ends meet.
Using credit to cover your living expenses because your salary is not lasting until the end of the month is not a sustainable solution. If you are dependent on credit cards, loans, store cards and overdrafts to buy food and pay for everyday expenses, you are already on the slippery slope towards a financial crisis. It is only a matter of time before you run out of credit.

3.You are unsure how much money you owe creditors.
If you are avoiding your debt it may be because you suspect you owe more than you are able to handle. Ignoring your debt obligations will only make the situation worsen. You may also be avoiding your credit report because it holds the truth to your financial reality. Checking your credit report is an important first step to controlling and improving your financial health.

4.You are avoiding answering phone calls because it might be your creditors calling.
If you are skipping payments and avoiding calls from your creditors and/or debt collectors, it is definitely time to seek a solution before your creditors start taking legal action against you.

5.Worrying about your debt is causing you to lose sleep.
If you are losing sleep over your debt, approaching a debt counsellor to assist you can help give you peace of mind because your finances are back on track.

Consolidating your debt into one lower monthly instalment and freeing up cash flow can save you thousands of Rands and help you to pay off your debt instead of incurring more.

October
9
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Budgeting when you need debt help

If you find yourself in need of debt help and struggling to make ends meet, it’s likely that your budget (or lack thereof) doesn’t reflect your earnings. Budgeting can prevent getting kicked out of your house, increased debt as well as ruining your credit profile. It’s never too late to start working towards your financial goals, so why not start with these Budget Tips for when you need debt help to make life a little bit less stressful?

May
28
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5 tips to stick to your Debt Counselling payments this winter

The winter season is upon us. This can cause you to overspend on items which will keep you warm. Sometimes, overspending on food and clothing during winter can leave you with little or no money for more important things like paying your monthly debt counselling payment.