How to let go of your toxic and wasteful relationship with money
ALEXANDRA – Credit regulator's saving tips.
Consumers are urged to combine their New Year’s resolution of losing weight with credit ‘dieting’ by letting go of their toxic and wasteful relationship with money.
This according to a statement by the National Credit Regulator advising consumers to be resolute on credit management in order not to revert to bad spending habits like New Year’s resolutions which fizzled out and are replaced by old habits after a month.
Credit Ombudman, Nicky Mohan said financial health was important in a person’s overall wellbeing, “Almost 10 million citizens are indebted. To be debt free, a lasting lifestyle change will require discipline.”
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Mohan attributed indebtedness to:
- Instant gratification when consumers can’t wait and save enough money to buy items in cash
- Over-indulgence and falling into purchase temptation by adverts
- Lack of credit knowledge and understanding of the true cost of credit, interest, fees and penalties for late or non-payments
- Taking credit to compete with lifestyles of neighbours or peers
- Not saving for unforeseen circumstances like job loss and emergencies.
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To get started, Mohan advises consumers to:
- Avoid being tempted into credit by ‘you qualify for’ or ‘you have been pre-approved’ adverts
- Pay up credit and don’t skip or pay it late to avoid compounded interest and bad credit rating by credit bureaux
- Destroy the credit card after final payment to avoid further credit temptation
- If tempted into credit ask yourself if the intended credit purchase is a need or just a want
- Learn to say the following three phrases: ‘No, I cannot afford’; ‘It’s not in my budget’ even when asked for assistance by a relative or friend and be clear on what you can afford or how far you can stretch your budget
- Ask yourself how much percentage of your income goes towards servicing debt? How long your money stretches between pay days to avoid taking short-term loans.
- Cut out some luxuries and replace them with things like carrying lunch instead of buying take-aways, eating at home and not shopping centres and joining a lift club for transport to work
- Save and purchase in cash to avoid interests and fees.
Details: National Credit Regulator 011 993 4975
