Dear Member

Hope you are having a good start to 2013.

January is always a difficult time of the year for me because I tend to spend a little bit more money during the festive than I plan to plus there are school fees. So I always work harder every January to find ways to reduce my monthly expenses. This January, I attacked my car insurance premium. I never like the idea that as my car grows older, my premiums increase. No explanation will every satisfy me. In the past, I would have had to get phone numbers for at least 3 to 4 insurance companies and then call each one of them to get quotes to beat my current insurance premium. Thanks to Hippo, this time I only had to log onto http://www.hippo.co.za/ and I completed a simple form about me and my car. Within seconds, I got back about 8 quotes. I left a message asking them to call me. I was paying R770.27 for my poor old car and within a day, I had signed up for similar comprehensive insurance with comparable excess at only R326.95. I saved myself R443.32. Another big plus for me is that with the old insurance, I had to state who else could drive my car and if the car were to be in an accident or get lost while another person (not the person listed on the insurance) was driving it, the company could repudiate my claim.  I now have an open driver policy so anyone with a driver’s licence can drive my car, for as long as I am the regular driver.

CAUTION: I want to stress that the cheapest insurance is not always the best insurance. As an example, I had to forego the cheapest insurance because it required that I was the only driver. I certainly don’t want to be the only person that can drive my car so even though that was the cheapest quote I got, I had to let it go. So please make sure that you still get the same comprehensive insurance and that you don’t agree to something you cannot honour e.g. agreeing that you will be the only driver of your car when you know that you do allow your friends and family to drive your car sometimes.

WHAT WILL YOU USE YOUR SAVINGS FOR?  If you go ahead and get yourself cheaper insurance and make a saving, please make sure that you put the savings into good use. Some suggestions I have for you are:

• Use the savings to pay off your debt, if you have too much debt. There is no point in saving money when you have a lot of debt because debt is very expensive. Please refer to pages 14 -15 of the book From Debt to Riches to see how much each type of debt costs you

• If you save at least R300, use the savings to buy exchange traded fund shares. Please read Chapter 16 of the book From Debt to Riches entitled; The beginner’s guide to the stock exchange. You only need R300 monthly to buy shares. When it comes to saving; it is better to start small and increase the amount you save monthly as your income grows otherwise you may never start saving if you are waiting until you have lots of money.

• If you live in Gauteng, ag shame you might just have to use your savings for the etoll J

Do you have tips for us on how to reduce monthly expenses? If so, please send your tip to info@thuthuka-sa.co.za and let’s spread the cheer

COULD YOUR CAR HAVE A RESIDUAL PAYMENT YOU ARE NOT AWARE OF?

I received this email from one of the people that bought my book From Debt to Riches.

Hi Phumelele

I need your advice regarding residual payment. After reading your book I discovered that there is a residual payment on my car. What can I do now either to get out of this situation or to lessen the final payment? I bought the car in December 2011 and the last instalment is in December 2017, when the residual amount of R95 000 is due.

Is it legal for sales persons not to advise a client about residual and its implications? Is there anything I can do about this?

Thanks

Musa*

*is not his real name

Please read Chapter 5 entitled Is Your Car Driving Your Destiny? before you buy a car. Once you are in a situation like this, it is very difficult to get out of it. You are supposed to read the contract before you sign and question anything you don’t understand. It would be very difficult to fight such a case because the sales person is likely to argue and say they told you about it. Musa can increase her monthly instalment on the car so that she reduces the residual payment over time.

4416 copies of From Debt to Riches have been sold making it an SA Best seller. Get a copy for yourself and find out why it is so popular. Available at CNA, Exclusives, http://www.kalahari.com/ and other places where books are sold for just R134 a copy

You can invite Phumelele Ndumo to address your staff on good money management skills. Visit www.thuthuka-sa.co.za to find out more about her talks and workshops.

Warm regards

Phume

Phumelele Ndumo

www.thuthuka-sa.co.za