The festive season is a time to switch off from work, recharge the batteries and spend quality time with friends and loved ones. It is also a time when many people throw caution to the wind, and sometimes, their budgets as well.
You can avoid a financial hangover in the new year by considering the following tips: Create a spending plan. Draw up a financial plan that accounts for your wants and needs between the end of November to January. As many people get paid early in December, the goal should be to stretch the November salary as far as possible into December, so as not to dip into their year-end paycheck too soon. Prioritise debt and savings. If you are fortunate enough to receive a bonus, maximise the windfall by allocating a portion to your savings and investment accounts. Provisions should also be made for paying off outstanding debt. Hide the credit card. If you are ill-disciplined, remove your credit cards from your wallets to avoid unnecessary and costly spending. Beware of festive season scams. Phishing attacks are prevalent at this time of the year. Be sure to examine emails and SMS messages very carefully, and be cautious of clicking on links. Always hover over links before clicking on them and take note of the URLS they direct you to.
0 Comments
With Discovery Bank you are able to activate a Revolving Credit Facility of R20,000 to R500,000 and you simply transfer money to your credit card or transaction account in seconds. You’ll only pay monthly fees when you use your facility - with super-flexible repayment terms. Once you’ve repaid an amount, it’s available again and again to revolve around your financial needs. Say hello to credit that revolves around you! Whether you are renovating your home, planning a last-minute getaway, or handling unexpected car and home repairs, it’s the most convenient and flexible way to access credit.
Ready to revolve? Follow the steps below to apply for a Revolving Credit Facility:
Read the terms and conditions and find out more about the Revolving Credit Facility. Source: Discovery Bank If you would like to apply for a Discovery Bank account contact Shelley email: invest@daberistic.com tel:(011)658-1333 Last month I talked about Step 2 - Do Not Spend More Than You Earn. Let's continue with Step 3 - Do Not Take On Credit. South Africa is a westernised economy, its financial system is modelled on the European and American credit system. If you have a steady income and a good credit score, it is easy for you to get credit. Credit is generally defined as a contractual agreement in which a borrower receives something of value now and agrees to repay the lender at a later date—generally with interest. Simply put, when you buy something now and pay it later, you are using credit. Examples are when you use your credit card to buy furniture and TV and put it on budget over 12 months. Based on your income and good credit score, the banks will want you to apply for credit card and give you a credit limit. As you manage the card well, pay the amount due in time, and your income rises, the banks determine that you are creditworthy and increase your credit limit. The banks advertise that the advantage of a credit card is you can get 55 days free of interest, that is the maximum interest-free period you can get. When you receive your monthly credit card statement (by now most banks send the statements electronically), you need to pay attention to: credit limit - the amount granted to you by the bank closing balance - the amount you owe on the credit card at statement date minimum amount due - the minimum amount you need to pay the bank payment date - the date by which you need the pay the bank It is very important to note: IF YOU DON"T PAY THE FULL BALANCE DUE BY THE PAYMENT DATE, YOU WILL PAY INTEREST Many clients I have consulted don't understand this, and they think it's OK to pay interest on their credit card, as they only pay the minimum amount due. But this is not OK! This is poor financial behaviour. Financially smart people understand how credit cards work. They use credit cards to their advantage. They buy things on credit. They pay the full closing balance on or before the Payment Date. They don't pay interest on their credit cards. You need to inspect your credit card statements for the last three to six months. If you pay interest every month, then you need to reset. Reduce or stop spending using your credit card, work on paying off the full balance. Once you have done that, then you get into the habit of paying the full balance by the payment date every month. Set up a reminder or have an automatic debit order to settle the balance. Remember, the amount you owe on your credit card, to you it is credit card debt. To the bank it is credit card asset. It is an asset because they earn interest from you. Currently the banks charge you between 12% to 18% interest on your credit card debt. That's a lot of interest to pay! You don't even earn this kind of return on your long-term investments. Stop giving more money to the bank than you need to! Rather keep that money in your pocket. I have some rules for credit cards, which I advise my clients to follow:
Don't take on credit, it means you get into debt. Apart from financing high-value items such as a property, a car, business or study loans, you should not take on credit. |
AuthorKevin Yeh Archives
January 2025
Categories
All
|