As we say goodbye to the extremely hot and windy summer months and say hello to cold fronts, rain and hail, we must also bear in mind the cost involved in the change of season. This period can have a large impact on various line items in your budget. Here’s why winter generally costs you more money.r
19 February 2016
Access to loans is as easy as one, two, three. Getting out of debt might not be that simple.
Credit Providers make it so easy to access debt. This makes knowing how to manage your debt so important.
Here are three simple steps that will set you on your way to beating the heat of debt and staying in control all year round.
Know who you owe and how much you owe
The first rule for effective debt management is to know what types of debt you have. This sounds a bit obvious but you would be surprised. Over half of South Africans who have a credit agreement, are in arrears on their accounts.
Start today, sit down with your account statements and put everything in a simple table like the one below:
Who do I owe | How Much do I owe | What do I pay each month | When will I finish paying
This table will help you to understand exactly how much money you need to put aside for your debt repayments every month and more importantly, how much longer you have to pay them off.
Know how much your debt costs you
Credit providers are allowed to charge fees for providing you with credit. These often include initiation fees, interest, service fees and credit life insurance. It is very important that you look at your statement and see how much of your installment is going to fees and how much is actually paying off the original amount of money you borrowed. Knowing the fees and charges on your credit agreement means you will be in a better position to pay your accounts off quicker.
Prepare a monthly budget
A budget is essential if you want to manage your finances. Without one, you will never really know how you are doing financially. Your budget is a list of your income, living expenses and debt repayments. You need to ensure that your living expenses and debt repayments don’t add up to more than your income. If they do, you need to cut out some luxuries to avoid having to borrow more money that you already can’t afford to pay back.
At this point if you see that even after cutting out luxuries, your expenses and debt repayments are more than your income or leave you with little or nothing to save or invest, you need to contact a DebtBusters immediately. We can help you to consolidate your debt and reduce your monthly repayments.