OPINION – South Africans advised to heed signs of financial stress

An uncertain economy, high levels of personal debt and the desire to reward oneself in December after a brutal year mean many South Africans either have money problems or may have in the near future.

CAPE TOWN, November 27 (ANA) – If you recognise the signs of financial stress and act quickly, you leave yourself more options to get out of debt or get help to restructure what you owe, according to a financial official at a South African debt counselling company.

DebtBusters chief operating officer Benay Sager said an uncertain economy, high levels of personal debt and the desire to reward oneself in December after a brutal year mean many South Africans either have money problems or may have in the near future.

“Taking action and dealing with the problem will usually make you feel better. Inaction will inevitably worsen both the financial situation and your mental stress. The more stressed and worried you become the harder it becomes to do anything,” he explained.

He said worrying about one’s financial situation is usually one of the first warning signs. It starts with niggling worries and can lead to sleepless nights.

“Don’t ignore it. You may still have time to cut out unnecessary expenses and should definitely get some advice.

“If debt repayments mean you don’t have enough money to save some each month, it could indicate you’re financially overstretched.”

There is a difference between not having any savings and being unable to save, according to Sager.

If one is unable to save because they have to repay debt, then that means they are borrowing more than they should. He says people who are not saving because they are spending money on entertainment, clothes or other discretionary expenses should reconsider financial priorities.

Not being able to pay bills is a sure sign that one is struggling financially, but on its own it doesn’t necessarily mean one is financially stressed yet.

“If you act quickly and explain the situation to lenders, you may be able to work out a payment plan or change the terms of the loan. You may also be able to re-prioritise your spending, so you are able to make all your monthly payments,” Sager said.

“A good way to do this is to draw up a budget so you can see exactly where your money is going and cut any unnecessary expenditure.”

He added that if one is relying on credit cards, dipping into an overdraft account, taking out last-minute loans or other forms of credit to meet basic expenses such as food and fuel, a big red warning light should be flashing. Usually it’s only a matter of time before they max out their credit card.

Borrowing to pay debts is an unhealthy financial situation, advised Sager.

“If they recognise the signs early enough and act quickly, some consumers will be able to get themselves back on a sound financial footing. For those who will need some help, the good news is South Africa’s debt counselling sector works well. Last year, DebtBusters alone issued 5,000 clearance certificates,” said Sager.

– African News Agency (ANA); Editing by Yaron Blecher