5 signs you need debt help

22 November 2015

It is frightening how quickly you can move from being in control of your finances to desperately grasping for a financial life raft. On reflection, many of our clients realise 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 financial stress. Preventing poor financial decisions and knowing when to ask for help is by far the best way to avoid financial disaster.

We have put together a list of these tell-tale signs for you to consider…

  • You have never checked your credit report

Everyone should know their credit score and should manage what’s on their credit report. For all you know you might have judgements on accounts that you think are closed but aren’t and have been gathering monthly fees and charges. If you have never received your credit report, don’t delay. This is the first and most important step to controlling and improving your financial health.

  • You don’t have a monthly budget (at very least in your head)

Not having a budget means you do not know how much money is coming in and going out of your bank account. It also means you do not know how much you are spending, or what you are spending your money on. A budget is a breakdown of your income and forecasts your expenses. By tracking your actual spend against your forecasted expenses, you are able to control your cash flow and avoid spontaneous spending. Knowing how much money you have left each month after paying all your living expenses, motivates you to save for the things you really want so that you don’t have to buy them on credit.

  • You use credit to pay for monthly essentials

If you are dependent on credit cards, loans, store cards and overdrafts to buy food and pay for everyday expenses, then you are already on the slippery slope towards financial disaster. It is only a matter of time before you run out of credit. You should seek help with your debt immediately. 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.

  • You do not have any savings

It is a known fact that South Africans are not very good at saving. Having an emergency fund can save you from having to take out expensive loans when life’s unforeseen circumstances occur. If you are unable to save because your debt repayments are too high, then you need to seek help with your debt. Your budget needs to include a savings portion so that you do not have to borrow when times are tough or when you have to buy something that you really need.

  • You do not know who to talk to you about managing your debt

Acknowledging you have a debt problem is a big step, but only half the solution. If you are serious about helping yourself towards a debt free lifestyle, you need to talk to a professional that is equipped to help you. Contact a financial advisor or alternatively contact a debt expert like DebtBusters for a free credit check and debt assessment.