Practical steps to reduce your financial stress
Start with a plan to pay off short-term debt you have
“The road to stress-free finance starts with a plan to reduce debt, especially shortterm debt with high interest.”
This is advice from life insurer Bidvest Life chief marketing officer Zanele Ntulini. But she admits that it’s easier said than done.
“It’s been a stressful few years. First, Covid-19 turned our world upside down. And now, interest rates are rising as fast as the cost of living, making it more difficult than ever to have financial peace of mind. So, how do we reduce our financial stress levels as we enter 2023?
“The first step is to understand why you might be feeling anxious. For some, it’s an overwhelming debt burden. For others, it’s not having a financial safety net for when things go wrong. Or you could simply be battling to pay your bills every month. But once you know why you’re stressed, you can start planning to fix the problem,” said Ntulini.
Thembani Gomba* is taking steps to deal with the problem.
In 2018, he bought a car and months later, struggled making it through the month with his R26,700 salary.
“I had a loan and was paying back about R2,500 every month. The car instalment and insurance went up to R7,500. My rental is R4,600 and I still need to pay for utilities, buy petrol and food.
“For months, it seemed I was drowning in debt. I also have two retail accounts because I love expensive clothes and I could not afford to buy these items for cash,” Gomba said.
But as months went by, he realised that he was not enjoying his money and literally got to the next payday with nothing in his pocket.
“I realised I was suffering. The first thing I did was to stop buying clothes on credit. Now, I budget for things. It could take me two to three months to get it but I won’t be paying any interest on it.
“I have closed my retail accounts but I am still paying them off. I have a credit card and I have given it to a friend to keep it for me. This has saved me from incurring more debt because I would go around buying stuff I did not need.”
He said spending far less on clothes and other stuff has led him to pay a little extra towards his car repayment plan.
“I am learning along the way and I am happy that I am almost done paying off the loan and retail accounts. Once that i s done, I will be saving more towards a deposit for a house.” Ntulini s tips towards reducing financial stress:
Get out of debt: Set a budget and stick to it. And then discover the magic of the debt snowball: pay the minimum balance owing on every account and put any extra money you can into the smallest debt until it’s paid off. Then take the amount you were paying for that debt, and apply it to the next biggest debt. And so on.
Create a financial safety net: The pandemic showed us how fast life can change. Start building up an emergency fund. The earlier you start saving and investing, the more financially healthy you will become.
Put the right insurance in place to protect your loved ones and your most valuable assets. And make sure you have a last will and testament: it’s these small actions that give you more control.
Protect your income: “Your biggest asset by far is your ability to earn an income. Ask
‘‘ I am almost done paying off loan and retail account
‘‘ Income protection is the number one priority
yourself – if you lose your income due to injury or illness, how long will you be able to meet your financial obligations,” said Ntulini. “Income protection should be the number one priority for every working South African. It provides security when we need it the most. It pays all your other insurance, medical aid, household expenses and school fees when you can’t earn.”
Speak to a financial adviser: “A financial adviser is one of the most valuable allies you can have. They help you choose the best options to suit your pocket and your needs. goals, and the right insurance. I can’t imagine my financial life without an adviser.” *Not his real name mashabas@sowetan.co.za