Keep your wits about you this silly season
The temptation to splurge may be strong, but the price of debt is high
WE ARE into the silly season. Christmas might be over but many people are still on holiday, throwing caution to the wind. Some might have received bonuses, splurged on restaurants, gifts and luxuries.
But just because it’s the silly season, doesn’t mean you should suffer in the coming months or even years. And while the temptation exists to blow the budget, many people forget about budgeting altogether and don’t have any fat in the budget to call on in emergencies.
Even though we’re advised to put out the fires by servicing debt with whatever bonuses we might receive, far too many are still opening new store accounts and taking out micro loans in order to buy those niceto-haves like televisions or spoil the children with a stash of presents.
Little wonder then that South Africans are among the most indebted people in the world. And if we don’t have the money we simply take out loans, paying a premium for the privilege.
The National Credit Act’s new affordability assessment regulations, which came into effect in September, might have put the brakes on consumers taking on more debt than they could reasonably afford, but there’s always a loophole which people are only too happy to exploit. So the hard-up for cash turn to pay-day loans and false promises of “blacklisted welcome”.
The former charges extortionate interest, the latter is a scam: enticing those not credit worthy, they demand upfront “initiation” fees which are illegal. If you’re trying to take out a loan and you’re being asked to pay money for it, know this: you’re being fleeced.
Essentially, the advice is to go on diet in December in order to eat in January. Because we get so carried away with the festive fever that we don’t think about the school fees, stationery, uniforms, bond, municipal accounts, car payments and other bills that are due in the new year.
A City of Ekurhuleni radio ad campaign has warned, not so subtly, that the council’s credit control department will remain open for the festive season, which is why residents should pay their accounts on time to enjoy uninterrupted services.
It shouldn’t be necessary to send out reminders because we know these bills are due. And most people are paid early in December, which is why companies are inclined to debit earlier too. Being asked if you were okay with that though, would be nice so you can ensure the money is in your account. Either way, it has to be paid.
Those in Joburg, however, might not have appreciated reminders to pay for municipal services in light of an abysmal lack of service from Pikitup, with residents’ bins being overturned in the streets, yet workers in Randburg still had the gall to demand a “Christmas box” when they arrived days late for collection after throwing their weight about town. The demands for a “Christmas box” is annual but resist the urge to turn it down too sarcastically. After all, they know where you live.
Then there’s the City of Cape Town’s warning that people shouldn’t be drinking on the beach. Liquor, sun and water are never a good combination. People get careless, aggressive even, which is when accidents happen. So, if you’re headed to most beaches in South Africa, expect to have your cooler raided (or confiscated) and having to pay a R500 fine.
The same applies when driving. Drivers know that if they get caught over the limit, they’ll be arrested, but do you know if a passenger drinks – or if you have open or empty bottles of alcohol in your vehicle indicating consumption – you could also face arrest. Our road accident rate is frightening and the next victims could be you and your family.
Insurance is the one thing you don’t want to lapse over the festive season. Pay your premiums, even if they’re grudge payments, because if you don’t, you won’t be covered for that break-in that is likely to happen at this time of year. Or the accident, possibly caused by a drunk driver who thought he/she was more sober than their mates and factored in the expensive wine and extra tequilas before considering signing up to a drive-you-home service.
When it comes to cars – have them serviced before a trip and make sure you have a decent spare and/or a temporary tyre fix in a can, as well as all the tools you need to change a tyre. Because when you’re miles and miles away from your nearest approved towing service, it can be a very uncomfortable and even dangerous wait.
And then there’s Christmas: a “time for giving”, far beyond our means. It’s a good time to remind the family that Santa’s on a budget this year because who knows what next year might bring. The bonus we might have received should be channelled towards debt but in our mañana culture, it’s easy to lose sight of the fact we need to get on top of that which is most important. Rather bite the bullet now than suffer in the future.
And finally: if you manage or own a company, now is not the time to take your eye off your operations and staff.