Durban - Forty percent of consumers in South Africa say they have too much debt that they cannot cope with, while the same number of people also have impaired credit records, according to a Debt Rescue survey.
In the survey, 68% of South Africans also said they don’t have any money left at the end of the month.
Debt Rescue CEO Neil Roets believes that rising inflation rates and stagnant incomes have created a situation where more consumers have turned to credit cards and personal loans to make ends meet.
Consumers are also facing the pressure of petrol hikes, high unemployment, a real decline in household income and increasing food prices.
“South Africans are unable to generate savings, do not have funds to fall back on in dire circumstances and as a result, they borrow. This is a very dangerous situation to be in,” Roets said.
Here are four ways you can save more money:
One seed at a time
Do a thorough inspection of where you can cut down costs by having a thorough look at the expenses. Getting a clear picture of your financial situation will help you take charge of your income.
A good way to approach a savings plan is to plant one seed by having a good look at your expenses and cutting one small cost every month and then building from there. This will be the first seed in your savings plan that can grow step by step.
Save money for emergencies
Shave off some money from your monthly expenses and instead put the money away in an emergency fund for a rainy day. The fund will be useful when you have an unexpected emergency instead of going into debt.
Change your shopping habits
Changing or tweaking your grocery shopping habits is a good way to save more money.
You can change your shopping habits by:
- checking newspapers for special offers
- shopping at stores in close proximity to each other to save on fuel
- setting a grocery budget before your shopping trip
- do online shopping to avoid the impulse items at the checkout aisle.
Close the gap
People whose expenses are more than their income, are on track to spend any savings they may have and potentially taking on debt.
“Now is the time to find something that will close the gap between what you earn and what you spend,” Roets said.
You can close the gap, getting that side-hustle that you have always wanted to start off the ground or a new side job.
You can rent out the spare room in your house with Airbnb or put your culinary skills to use by starting a baking business. People can take on an extra jobs like bartending, waitressing, house-sitting or tutoring to earn more money.
“My advice to those who are in a debt trap is to remember that you are not alone. Seek help from a registered debt counsellor who can assist you to manage your financial predicament,” Roets said.
“It’s clear that South Africans can no longer cover their basic costs – with many turning to credit to cover their shortfall. Yet, the only way out of the debt trap is to cut costs and save wherever possible.”
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