One of the best resolutions you can make for 2017, or any year for that matter, is to manage your finances better. Not only is this a good resolution to make, but it’s not complicated. Financial freedom, stability, and even wealth generation, can be developed over time by following a few easy maxims.
5 April 2016
DebtBusters’ has seen an increasing number of people under the age of 25 who are struggling with debt, with almost 30% of new DebtBusters clients under the age of 30. Many of these individuals are ‘sandwiched’ by debt taken to support parents, siblings’ educational aspirations and their own children. The lending of money to family members or taking out credit on their behalf is often done from guilt or a sense of obligation, without proper thought for the consequences. These youngsters inevitably find themselves in a situation where they (in their early 20’s) are subjected to more borrowing to repay existing debt and to meet day-to-day obligations.
As soon as these youngsters start earning money, their families begin to put pressure on them to help with expenses like buying clothes or food or paying for the education of a younger sibling. They don’t realise that they are taking out too many loans and are left feeling trapped, needing more and more loans to pay their current ones.
The latest Q4 2015 DebtBusters stats show that on average, those earning less than R5,000 per month would have required 146% of their net income to pay their monthly debt repayments, which is an impossible task. While no one likes to see family or friends struggle financially, helping out during a real crisis is different than being used as the family bank.
DebtBusters would like to offer some advice to the 20-something’s out there that are struggling with debt…
If your family is relying on your generosity time and time again, sometimes the best help you can give is supporting them to resolve their situation. Helping your family learn to live within their means and teaching them successful money management strategies will have lifelong benefits beyond any short-term cash flow assistance you are able to give them today. Start by getting yourself out of debt so that the future of your own children is not one that is burdened by financial difficulties.
If you know someone in this situation, help them by referring them to DebtBusters before it’s too late.