Dear Member

Some 9 million South Africans have an impaired credit record due to poor management of their personal debt. The December bonus is a once- a- year opportunity to try and cut down on your debts. Also, January and school fees are just around the corner. You could use some of your bonus to pay next year’s school fees and buy books, school uniform, etc…

How to stay out of debt

There are3 major ways to stay out of debt

1.       Keep away from bad debt altogether. Debt is like a disease, prevention is better than cure.

2.       Keep your debts to an absolute minimum and get into debt for real necessities e.g. a home and a car, not nice-to-haves such as clothes, smart phones, etc…

3.       Pay for all your debts on time every month. The easiest way to do this is to pay for your debts through a stop order.

Read chapter 2: Manage your debts (or they will manage you) of the book From Debt to Riches: Steps to Financial Success to find out the difference between good debt and bad debt

Debt trap

Many people are in debt because they chose to buy staff on credit that they could really not afford to buy. Before you take a personal loan, a credit card or buy furniture on hire purchase, ask yourself this question: If you cannot afford to pay for it in cash NOW, how can you afford to pay for it in the future, with interest, initiation fees, credit life and other costs added to the original amount?

Read page 16 of the book From Debt to Riches: Steps to Financial Success to find out how much debt really costs you.

Beware of Drive Now & pay your first instalment in April 2013 adverts!

There are many advertisements of cars and furniture where you are encouraged to get the car now and pay your first instalment only in April 2013. Such adverts appeal to your “I want it now” instinct. If these adverts appeal to you, it means you cannot really afford the car or the furniture. Why else would you not be too keen to simply buy now and start paying now?

Be money smart, keep away from bad debt – it is expensive.

Tell us how you will be spending your Xmas bonus and we will share brilliant ways with other readers

Have a great Christmas

Warm regards

Phume