How to get your bank account out of the red
NO ONE wants to default on their bond instalments or other account payments, but often in January and February, there just isn’t enough money to go around after a big holiday splurge in December.
“Instead of just lying awake at night worrying about how you’ll cope, or running up more debt at exorbitant interest rates, there are some positive steps you can take right away to help make ends meet,” said Rudi Botha, the chief executive of BetterBond.
The first of these, he said, was to “get real” about your financial situation. “Get your bank statements and find out exactly how much money you have available for January. Then make a list of your essential or fixed monthly payments (such as your bond or rent, car repayment and insurance premiums) and a separate list of variable expenses (such as your grocery, cellphone, utility and petrol costs).”
Second, pay the minimum amount the value of your vehicle decreases every year.”
Third, said Botha, you need to work on your expenses list and see where you can cut costs, because this was where the money would hopefully come from to cover extras like school clothes and equipment. “You might decide to buy only half your usual cellphone airtime this month. Many also cut out all alcohol, take-aways and restaurant meals in January.”
Other ways to save money are taking public transport or organising a car-pool with work colleagues and using your own car only when really necessary; cashing in any “points” you have built up on store-cards and rewards cards over the past year and using them now for essential purchases; and avoiding any additional commitments such as a new gym subscription until later in the year.
Fourth, he said, you need to tackle your family’s back-to-school requirements and buy only what you absolutely need right now. “Most schools will offer a discount if you pay the fees for the whole year, for example, but if you can’t manage that big amount right now, pay by the month. Similarly, just buy whatever uniform and stationery items your children need for this term. You can add the rest in the course of the year, and it is important to keep the use of your credit and store cards to a minimum now to avoid increasing your debt load.” off any debts. to pay | Supplied by BetterBond
Employment.
◆ Employment has historically been a challenge for the South African economy and is arguably the largest social ill facing the country. In comparison to the third quarter of 2017, the current unemployment rate has decreased from 27.7 percent to 27.5 percent. Although the change is only marginal, it represents a step in the right direction. If South Africa is to overcome the challenge of its persistently high unemployment rate, large-scale longterm investment will be required to provide employment opportunities that are sustainable in the long run.
The three factors discussed above paint a picture of an economy that struggled over the course of 2018 but performed reasonably well given the difficult conditions. Unemployment and the cost of living have been kept in check to a large extent and have even performed well given the recessionary period that South Africa faced.
Hopefully, 2019 will be the “year of hope” that we all hoped 2018 would be when we were in the midst of “Ramaphoria”.
Bryden Morton is executive director and Chris Blair is chief executive of 21st Century, a remuneration consultancy.