For most South Africans money management is a challenge that we'd rather ignore. We are so focused on earning an income to pay off our debts that we struggle to truly enjoy life.
This week on #BeFinanciallySmart FNB Head of Consumer Education Program gave us tips on how we can learn to manage debt effectively and be well on our way to financial freedom.
Financial challenges never stop and they come unexpectedly. That's why we need to be careful with how we spend our money— Eunice Sibiya, FNB Head of Consumer Education Program
According to Eunice, the best place to start with managing your debt effectively is taking a sober a look at your monthly bank statements and really paying attention to all the transactions, loans and credit cards. By doing this, it will give you a clearer understanding of the following:
- The total outstanding balance on loans to understand what target you need to reach.
- The terms of your loans to know to know how much you must repay and for how long.
- The interest rate on loans as they have a massive impact on your repayments
- The total monthly (or once off) fees that you are paying on your loans.
Once you have paid off an account or loan, take that money and put it towards other debt so that you can shorten the lifespan of your debt.— Eunice Sibiya, FNB Head of Consumer Education Program
Eunice Sibiya also mentions that before you get into more debt by taking another loan, consider these four tips:
- Assess your reason for the loan and whether it is a need or want.
- Make sure you can afford the repayments on the loan.
- Commit to understand the terms and conditions of the loan
- Stick to your end of the deal as this is an agreement between you and the financial services provider.
Listen to the full interview with Eunice Sibiya below