After a difficult year, most of us need a break and time to recharge. That’s not going to happen if you spend the holidays worrying about how much you owe and how you’re going to make ends meet in January.
A reputable debt counsellor will do a free assessment, advise whether you can benefit from debt counselling and explain how the process works. Having someone to help you can take away much of the anxiety associated with dealing with debt.
Sager said it is critical to keep up debt repayments over the holiday break. NDCA data shows on average it takes up to two years for consumers to catch up on payments missed in December. In the current economy, it’s likely that it could take longer.
He said while the NDCA advises people to keep up repayments, it recognises this will not be possible for everyone. If that is the case, get help. Delaying can negatively affect your credit record, put your assets at risk of repossession and if you wait too long, debt counselling may no longer be an option.
Here are three tips to help save you from going broke this festive season
Expert weighs in on how to swim against the tide of borrowing
Decking the halls of our favourite malls are faux pine trees, tinsel and mini Santas on a sleigh. It's that time of the year again when Black Friday sales and Christmas specials beckon for our open wallets and emptied-out e-carts. But there is a darker side to this jolly time of the year as many South Africans turn to loans or take on more debt they cannot afford.
According to the National Debt Counsellors’ Association chairperson (NDCA) Benay Sager, this treacherous cycle has intensified over the past two years due to higher inflation and interest rates.
Sager said repayments on loans add long-term pressure on households just keeping their heads above water. Since it takes an average of two years for consumers to catch up on payments missed in December, they could experience serious financial difficulty if an unexpected expense or emergency arises.
“Typically what we see happening in mid-January and extending into February is that consumers find themselves in a pinch and borrow money to make it through until they are paid. The problem is that the repayments on the loans add long-term pressure on households which are only just keeping their heads above water. One unexpected expense or emergency can result in serious financial difficulty,” said Sager.
Here are Sager's tips for those looking “to swim against the tide of borrowing” this festive season:
PLAN AHEAD
If you are paid early in December, remember you will need to stretch your salary until the next pay cheque. Allocate money for usual living expenses for the full period, factoring in January expenses, before you decide how much to spend on gifts and entertainment.
Your existing debit orders will run in December. If there isn’t enough money in your account to cover these, you might fall behind on your payments and your credit score could be affected. Your bank may also penalise you by charging additional fees.
BE CONSIDERED
If you are lucky enough to get a bonus, you could suddenly have extra money in your account. Although you may feel flush, resist the temptation to splurge. Think first about your financial commitments and consider saving or investing some to provide a financial cushion for the New Year.
GET HELP IF YOU NEED IT
After a difficult year, most of us need a break and time to recharge. That’s not going to happen if you spend the holidays worrying about how much you owe and how you’re going to make ends meet in January.
A reputable debt counsellor will do a free assessment, advise whether you can benefit from debt counselling and explain how the process works. Having someone to help you can take away much of the anxiety associated with dealing with debt.
Sager said it is critical to keep up debt repayments over the holiday break. NDCA data shows on average it takes up to two years for consumers to catch up on payments missed in December. In the current economy, it’s likely that it could take longer.
He said while the NDCA advises people to keep up repayments, it recognises this will not be possible for everyone. If that is the case, get help. Delaying can negatively affect your credit record, put your assets at risk of repossession and if you wait too long, debt counselling may no longer be an option.
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