One of our top debt counselors speaks on the issues of financial stress
Often in our life, we seek big solutions to the immense problems we have in our lives. Yet, with your finances it’s often the small changes in mindset that can yield the biggest rewards.
•    Avoid spending money you don’t have
Something that seems quite simple to do, but really isn’t, is to avoid spending money you don’t have!  It’s quite simple. If you have got by without something until now, chances are that you can get by without it for a little longer. Yet because we work so hard just to keep our lives from falling apart, we often feel that we need to spoil ourselves. There is no cash available, so what do we do?

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Before suffering under the yoke of debt review correct your poor spending patterns and look at your debt from a different perspective. When looking at problems, we often make the mistake of looking at them as insurmountable and telling ourselves that there is no solution. Yet, all we have to do – especially with our financial problems – is to sit down and look at things both logically and rationally. In doing so we will be able to analyse the situation, create a plan of action and find ways to follow it through. Often finding that the solution to the problems we face are often in the form of small changes to our lifestyle and way of thinking – as opposed  to the huge, dramatic ones we expected. Changing financial habits, especially if they are old and ingrained, is very hard. As our debt counselors would say, it’s often best to start with the obvious.

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Debt review is not a problem to worry about; it is a solution to actively pursue. Like everything in life, things definitely start looking up once you make the effort to do something about the problem – therefore, here are a few guidelines in dealing with your finances:

•    Know your financial status – Know who your creditors are. Know the balances owing on your home, vehicle; cards and so on. Know what your installments are and what interest rates you are paying. Go to the banks and shops and get this information. As a consumer, you have the right to know.

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Why is debt counselling in South Africa so necessary? Is it due to the current credit crisis that we are facing (ignore the news reports, our national and personal debt is still sky high); or is it because we are so inept – for lack of a better word, at handling our own finances. Times are indeed tough but we are not out of luck yet. Debt counselling is a life-saver for the hundreds of thousands of South Africans who are drowning under a sea of debt and Credit Matters will assist you in resolving your insurmountable issues. No challenge is too big or too small for us.

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A debt counselor from Credit Matters speaks out:

I had to check the calendar to make sure of the date! I could not believe that we are in April of 2010 already. The year has really flown by. Time flies, and it supposedly flies when you’re having fun! But who of us are not struggling in some way or the other, especially financially. Time is definitely flying by – but we are definitely not having fun!

There are still many people employed at clothing factories and construction companies who are still waiting for their companies to reopen. We all know how scarce work is. So while you are at home and if you have time on your hands, why not do something that every consumer needs to be doing; check your credit record!

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Financial stress was undoubtedly the theme for 2009. From the recession’s impact on consumer spending to the increase in debt counselling applications, South Africans have had a rough economic year and the tough economic climate has affected everyone. There are currently just over 18 million credit-active South Africans – with about eight million of those more than three months in arrears with one of their accounts. The country has R1.14 trillion worth of outstanding debt that was carried over into 2010. Everyone is suffering, so don’t feel alone.

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Ok, let’s have a moment of silence for all those in financial difficulty. Jinne, maar daar is baie van ons!

I think it’s safe to say that we have come back to reality, and many of us have hit the ground hard. Unfortunately, it seems that the South African consumer is just not learning! People are continuing to increase their debt – even when they know they cannot afford to repay it. For those that have some extra cash available, they just seem to be spending it non-stop!  It seems that those people lucky enough to have received bonuses last year spent it on looking good. For example, the budget priced clothing store Mr. Price recorded a 10.4% growth in December. We might not have school fees and food for January, but never mind – we looked lekker in the holidays!

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From early February, the US has intended to sell a proposed $81 Billion of all of its quarterly sales of long-term debt. It indicates that there is no reason to employ the use of larger auctions in order to finance its massive $1.6 Trillion budget deficit. The treasury department’s Assistant Secretary for federal finance, Matthew Rutherford stated that, “Going forward, we’re confident that the deficit situation is going to improve, supply’s going to come down and ultimately that’s obviously a positive for the marketplace.” As for the good news, the US gross domestic product has actually expanded annually by 5.7 percent (these are indications based on fourth quarter earnings).

UK politicians have indicated that those who are having financial difficulty with their bills are being turned away from debt counselling assistance. At the end of the fourth quarter in 2009, UK debt was at a staggering £1.5 Trillion, with one in ten consumers having issues with their bill payments. For a one-on-one interview regarding debt advice, the cost is £265. The government recommends telephonic interviews, as this is only £51. Making use of the internet is of course, even cheaper. Kevin Brennan, Consumer Minister was stated as saying that, “It is crucial that when people are struggling with debt, they seek help as soon as possible. The Government will not hold back from helping those most in need through these tough economic times.”

In a story that seems to repeat itself every few months or so, former Baywatch star Pamela Anderson is heavily in debt to the tune of one million dollars. If the star decides to go for debt consolidation, she could potentially eliminate 50 to 70 percent of her total debt. The star upgraded one of her many homes, and has not had the cash to pay the many construction workers and companies as of yet. Pamela, if you lived in South Africa, you should have contacted Credit Matters for a debt review, before you ended up as cannon fodder for the news reports.