Working smarter, harder essential
Madam,
Many people in the country are facing one of the toughest economic environments in modern history. High interest rates are not only applying pressure on people with bonds and vehicle repayments, but the current economic environment is also a hotbed for inflation, leading to an increase in the prices of goods and services. As consumers’ disposable income decreases, families face the unenviable task of cutting down on spending and in the process, they might forget to look at the longer term and building wealth.
Companies are under as much financial pressure as consumers. Bonuses are either a luxury or are being scaled back. Those lucky enough to receive a bonus should consider allocating a portion of this amount to reducing shortterm debt. Bonds and vehicle repayments are considered debt, but are considered better debt, as a house is an appreciating asset and a vehicle allows consumers to do their jobs.
However, short-term debt, such as credit cards or short-term loans, can be burdensome. While they offer immediate access to cash, the money spent servicing this debt is significantly more, especially as interest payments can spiral out of control. Eliminating debt may impact a household’s budget in the short term, but reducing these repayments will prove beneficial in future challenging economic climates.
Let’s acknowledge the obvious; a significant number of people perceive insurance as a reluctant expenditure, as there are no immediate, tangible advantages to paying premiums for an occurrence that might never happen. Not being sufficiently insured is a risky and unnecessary position
that could leave consumers exposed financially when they can least afford it. Considering that a huge number of the vehicles on the country’s roads are uninsured, this means there is a high chance that an accident might involve an uninsured driver. The sooner you start implementing your financial plan to reduce debt or save for your future, the more you will benefit. Saving will increase your funds over time and reducing debt will result in paying less interest on your loans.
There is no doubt that consumers are under financial pressure and are being forced to make tough decisions. However, it is still possible to build wealth by making use of opportunities. Small financially sound decisions add up in the long run, work smarter as well as harder when it comes to building wealth. Speak to your financial adviser to discuss your options and make sure that it is time well spent.
Rita C