We tend to focus on getting out of debt, but preventing a debt disaster is much less stressful and much more valuable in the long run.
With one in five South Africans having impaired credit records it has to point to a number of factors for people becoming over-committed financially. Fin24.com rounded up some main tips to avoid being a part of this statistic. We’ve expanded on them in an effort to make your life easier and 2013 the year you start and keep a debt free life.
After you’ve signed up for debt management advice it’s also a good idea to follow these tips to stay within your budget.
1) Your lifestyle should rely on your salary only
Don’t live above your means. If you get a bonus save most of it and enjoy some of it.
2) Spend money you have, not the credit available to you
Don’t think of credit facilities as an easy solution. It should be a last resort, but it is all too often used as a convenient way to afford the things we desire but not really need. Avoid store accounts and opt for loyalty cards instead.
3) Increase your debt repayments in line with your salary increase
This way you free up your income faster and you can use the money towards saving instead.
4) Focus on family activities instead of going to the mall
Malls are great temptations for children where parents give in all too often. Parents also spend more when they take their children to the grocery store. So if you want to stick to your grocery list and avoid tantrums, don’t take kids shopping.
5) Avoid temptation and resist ‘sale’ signs – ask yourself whether you really need it
Avoiding malls and sticking to stand-alone stores can go a long way in avoiding this temptation as you won’t have the urged to check out every sale.
6) Budget for the next year’s expenses.
Draw up a budget for all the expenses you already know you’ll have in 2013. Children’s school fees and other monthly payments might be significantly reduced if you can pay an annual premium. This also takes some stress of your shoulders for the rest of the year.
What are your expectations for this year? Are there any other tips you would like us to add? We want to hear from you.