South Africans are battling with the highest interest rates in a decade
With the highest interest rates in a decade, many South Africans are feeling the pinch and are looking for ways of to make ends meet. ALSO READ: Rand Report: Rand finds stability as US debt deal concludes INTEREST RATES July is National Savings Month, the National Credit Regulator (NRC), an agency of the Department of Trade, Industry and Competition responsible for the […]
With the highest interest rates in a decade, many South Africans are feeling the pinch and are looking for ways of to make ends meet.
ALSO READ: Rand Report: Rand finds stability as US debt deal concludes
INTEREST RATES
July is National Savings Month, the National Credit Regulator (NRC), an agency of the Department of Trade, Industry and Competition responsible
for the regulation of the South African credit industry, offers tips that can help ease the burden of managing debt to insure a nation of savers.
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TIPS ON MANAGING DEBT DURING THESE TOUGH ECONOMIC TIMES:
- Budget: drawing up a budget helps you to know exactly where your money goes instead of just wondering what happened to it. It affords you an opportunity to see if there spending leaks and spending on non-essentials, which can then be reined in to free some cash to be redirected to meeting your needs.
- Prioritise: identifying and prioritising your expenses is an essential part of managing your money. This means you can ensure that essential expenses, such as bond, medical insurance, food and electricity are paid first before the nice-to-have stuff.
- Reduce expenses: when faced with tough economic times, reducing expenses or debts is the most logical thing to do. Cut back on unnecessary expenses such as eating out, parties, costly entertainment, subscriptions (gym contracts, Pay TV and streaming services) and other non-essentials. Reducing expenses on these items frees cash that can be redirected to other needs and savings.
- Manage debt: the debt-to income ratio of many South Africans is very high. It hovers between 70% and 80% of their salaries. This means many South Africans spend a large portion of their incomes and salaries to service debt.
- Create an emergency fund: an emergency fund allows you to deal with unplanned expenses like car or home repairs without having to take out a loan. While it may seem like a daunting task to create an emergency fund during tough economic times, it is crucial to do so.
- Saving: In the Brazil, Russia, India, China and South Africa (BRICS) community of developing countries, South Africa has the lowest savings rate compared to its counterparts. Instead of saving, many South Africans are actively spending. While some of this is not within their control, there are pockets of opportunities for consumers to get it right. Many people try to save what is left after spending when they should be spending what is left after saving. If we get this formula right, we may start addressing the savings challenge in South Africa.
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