July is Savings Month and consumers are being urged to cultivate a culture of saving. Because most consumers do not save, they have to depend on credit to deal with economic and life shocks. Most consumers who approach the NDMA for assistance operate with a budget deficit of more than 30% where debt repayments and living expenses added together exceed their net income. An analysis of the income and expenses of consumers shows that it is possible, with discipline and adjustments to the budget by cutting out unnecessary expenses, for some consumers to manage to afford their living expenses, repay their debt and save. This however takes commitment and perseverance. Unfortunately this is not the case for many consumers whose budget deficit is such that the only option is to negotiate the reduction of their monthly debt repayment obligations or for them to go under debt counselling. There is a sizeable chunk of consumers whose debt levels are so high that even a reduction in monthly obligations does not assist in addressing the debt stress experienced. This is the case with consumers whose income has reduced due to divorce, retrenchment, unemployment or the failure of a business venture. While it’s difficult to even think about saving when salaries are being frozen, workers retrenched, and costs such as food, electricity and petrol just keep going up, now is the time to be sharp with less cash. “When times are tough, it’s more important than ever to make sure you’re tightening your belt and saving as you’ll need it for tomorrow,” says NDMA CEO, Magauta Mphahlele. Over the next couple of days we will share tips to help you get started :-)
Posted on: Wed, 24 Jul 2013 11:37:24 +0000
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