By Emsie Martin
July was national savings month, but all those ‘optimistic messages’ about ‘investments’, ‘more savings on funds’ and ‘putting extra money away’ that flood our emails, cell phone and other communication media, are ridiculous given the current circumstances.
“To put away savings is currently an impossible task and an unreasonable expectation. Instead, manage your debt, but as soon as you get your debt out of the way, you can save money quicker and reach your future financial goals effectively,” emphasises Carla Oberholzer, debt advisor at DebtSafe.
Whether or not you had savings before the pandemic, to handle any financial crisis is extremely challenging and exhausting. This is why it’s of cardinal importance that in times of hardship you try and manage and combat your debt proactively before focusing on your goal to have your savings grow.
Although was national savings month, to save is of course a financial goal and not limited to one month. However, times have become more difficult and therefore it’s essential that you rather do what is possible. First things first – focus on managing your debt. This will enable you to pay off your debt and pave the way for you to reach your savings goal(s).
How and where do you begin? Take note of two important aspects:
Firstly a proactive debt management approach will enable you to:
- Free yourself from too much debt.
- Prevent your debt from spinning out of control.
- Offer flexible space so that you can negotiate with your creditors when your financial situation changes unexpectedly.
- Have the capacity to tackle your finances in a practical fashion.
- Gain control over your finances and financial situation.
- Stay on the right track so that you reach your financial goals. In other words, to have the opportunity to increase your savings (as one of your goals).
Secondly, know what debt management entails.
- Is when you have an overview of your entire financial situation.
- Determines your debt-to-income relationship.
- Is the grouping of your debt accounts (according to those of a permanent nature and those who are most detrimental to your finances).
- Is to compile a budget according to your needs.
- Is how you utilise your budget so that you can reach your financial goals (including to save).
Incorporate the above tips with your financial plan. It will help you to move from a place where you feel overwhelmed to where you can start becoming proactive with your finances. Remember, step by step, little by little, slowly but surely every day – you are capable of doing it and you will get there.
However, if you have already tried to implement a debt management plan and still need professional help, make sure you get that help. Contact a reliable, authorised expert such as your banker, financial planner, or if it should be a serious debt issue, a register debt counsellor. Change your situation from where you are over your head in debt to a point where you enjoy financial freedom and have the opportunity to save.
The Solidarity Occupational Guild for Financial Practitioners is a community that focuses on bringing professionals who offer services in the financial industry into contact with each other, to afford young people an opportunity to enter a career in the profession, and being the watchdog that tackles focal points in the profession with feasible solutions. The Occupational Guild for Financial Practitioners offers members a network through which they can contact each other, share best practices and do business. Visit https://guild.solidarity.co.za/finances/ for more information.
Carla Oberholzer DebtSafe 0861 100 999; email: email@example.com or SMS your name and surname to 30898 (free SMS).