Break­ing the debt cy­cle

Finweek English Edition - - MONEY - BY KRISTIA VAN HEER­DEN

Debt i s not a l ways a bad thing. But un­for­tu­nately, it can bring out the worst in us, f inan­cially speak­ing. In­stant ac­cess to money we didn’t earn is very tempt­ing, but debt obligations of­ten re­sult in a soul-crush­ing cy­cle of es­ca­lat­ing spend­ing and re­pay­ment.

DEEP BREATHS

Avoid­ance may s eem eas­ier t han deal­ing with t he re­alit y, but of­ten it also makes the re­al­ity ap­pear a lot worse than it is. Once you’ve had a look at your f inances and taken a deep breath you can start drawing up a plan of ac­tion.

The­u­nis Kruger, head of un­se­cured l end­ing at Stan­dard Bank, points out that credit providers also have an in­ter­est in help­ing you pay off your debts. “If you are feel­ing over­whelmed and find­ing it dif­fi­cult to man­age your debt, it ’s worth re­mem­ber­ing t hat credit providers are nor­mally will­ing to f ind a so­lu­tion to help con­sumers. Credit providers would rather con­sider al­ter­na­tives such as ex­tend­ing t he credit pe­riod so that cus­tomers can man­age pay­ments rather than de­fault and never re­pay.”

He says that be­ing hon­est about your debt is the f irst part of tak­ing r e s pon­sibi l i t y f or past s pending trans­gres­sions and em­bark­ing on the road to mas­ter­ing your debt. KRUGER AD­VISES THE IN­DEBTED TO FOL­LOW TH­ESE STEPS WHEN YOU RE­ALISE YOU MIGHT FALL BE­HIND ON RE­PAY­MENTS:

Look at your list of cred­i­tors and set up meet­ings with rel­e­vant cred­i­tors.

Ex­plain your sit­u­a­tion and push to ad­just your re­pay­ment op­tions.

If one of your cred­i­tors is a bank, go to your branch and speak to a fi­nan­cial ad­viser that is ded­i­cated to help­ing you re­struc­ture your loan.

THE CARDINAL RULE OF DEBT RE­PAY­MENT

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.