South Africa’s savings rate for households, businesses and government is one of the lowest globally, standing at only 0.5%. These and other alarming savings statistics prompted the Savings Institute of South Africa (SASI) to launch an initiative to challenge consumers to live within their means, and to encourage positive savings habits. This effort termed “Savings Month” seeks to initiate conversations around overcoming debt, taking control of our finances, and building our general financial literacy.
Debt is a heavy burden to carry
Debt counsellor, DebtBusters, reported that, according to their data, consumers in South Africa need to spend around 61% of their take-home pay to cover their debt repayments. This leaves very little available income to save for emergencies and for retirement. Without emergency and retirement savings, consumers are walking a financial tightrope – one where there is no leeway or buffer for unexpected expenses. Spending such a large percentage of your salary on debt is quite literally crippling. It’s why they call it a ‘debt trap’. Once you find yourself in a debt trap, it is very difficult to get yourself out. By making the necessary changes to eliminate debt, you will reduce your financial burden and alleviate the ongoing stress associated with financial difficulties.
There are many reasons why South Africans are in debt, including the spike in the cost of living, elevated interest rates, increasing inflation rates, electricity price hikes, fuel price hikes, the high unemployment rate, but also the low level of financial literacy. By building awareness and educating consumers about debt, individuals can gain important insights into the impact of debt and financial stress on their lives. It further empowers individuals to have open discussions and discourse about overcoming debt and implementing strategies that empower them to take control of their financial situation.
Debt is bad for your emotional and mental well-being
Crippling debt can have a significant impact on your emotional, physical and mental well-being. By openly discussing debt, it reduces the stigma around the struggles associated with debt, allowing you to feel comfortable enough to ask for help and to get support by talking to a financial advisor. A financial advisor can help you develop workable strategies to reduce your debt. It's also important to remember that many people who ask for help and support feel a lot more at peace knowing that there is a plan in place to turn their finances around.
Prevention and early intervention are better than cure
By discussing debt and debt management, you can prevent yourself from falling further into excessive debt or experiencing severe financial stress. Raising awareness and providing information and education on financial management can help you make informed decisions and adopt healthy financial habits sooner rather than later.
Overcoming debt is critical for long-term financial well-being
Being open to discussing strategies and tools to overcome debt, you can start your journey to achieving true financial freedom. With proper planning, discipline and determination, you can overcome your debt burdens. By taking proactive steps to address debt and financial stress, rather than ignoring or avoiding the problem, you are taking an important first step to securing your long-term financial well-being.
Step-by-step guide to getting out of debt so that you can save more
If you are ready to work at getting yourself out of debt, carefully consider each of these steps as you put a plan in place to achieve your financial goals:
If you are ready to work at getting yourself out of debt, carefully consider each of these steps as you put a plan in
place to achieve your financial goals:
It is important to remember that being in debt is not a “game over” scenario. There is hope, empowerment and resilience in taking back control of your financial well-being. By implementing strategies and lifestyle changes, and seeking the necessary education and support, you can overcome debt and reduce your financial stress.
If you feel overwhelmed by your debt and need help navigating to financial freedom, you can speak to a financial
advisor at NMG. NMG has several accredited financial planners who have the resources and experience to help you achieve all your financial goals.
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