‘Make informed financial decisions in 2024’ – says expert

As we embark on a new year, it’s crucial for consumers to make informed financial decisions to avoid landing in debt. So, says debt counselling company, Debt Rescue.

Annaline van der Poel, Chief Business Development Officer at the company, says creating a realistic budget that accounts for your income and essential expenses is vital.

She says this helps in managing your finances more effectively and avoiding unnecessary spending.

“Make it a habit to save a portion of your income regularly. This is important for emergency situations and future investments. Avoid Excessive Debt: Steer clear of accumulating high-interest debt, especially through credit cards or short-term loans for non-essential purchases.

Van der Poel advises consumers to stay focussed on their financial objectives and to regularly review their financial plans.

Parents heading to the stores to purchase school supplies are advised to create a list and budget to avoid “unnecessary purchases” and keep spending to a minimum.

“Before heading out to shop, check what supplies you already have at home. Often, items like scissors, rulers, or unused notebooks from the previous year can still be used. For items that are used regularly (like paper, pens, or pencils), consider buying in bulk.

“This is often more cost-effective in the long run, especially when buying while they are on sale at the beginning of the year.”

Van der Poel believes comparing prices online and in different stores is a cost-effective method.

“Look for second-hand supplies or organise a swap meet with other parents. Many items like backpacks or sports gear can be reused and are often in good condition.”

Van der Poel says the biggest trend in 2023 was that consumers had to turn to debt to make ends meet.

“This included both credit card usage and short-term loans, to make it from one payday to the next to literally put food on the table. This was caused largely by massively high inflation (especially on food items), which in turn led to interest rate hikes, which increased debt repayments.”

According to Van der Poel, the start of the new year is an opportune time for consumers to reassess and strengthen their financial strategies.

Some financial advice to consider:

  • Review and Reset Your Budget: Begin by reviewing your budget from the previous year. Identify areas where you overspent and adjust accordingly. Setting a realistic budget that aligns with your income and goals is crucial.
  • Build an Emergency Fund: If you haven’t already, prioritise building an emergency fund. Aim to save enough to cover at least three to six months of living expenses. This fund acts as a financial buffer against unexpected events.
  • Manage Debt Wisely: Focus on reducing high-interest debts, such as credit card balances. Don’t be tempted to use credit for luxuries. And most importantly, don’t rely on credit for consumables such as food, as this is a clear indication that you might be over-indebted.
  • Educate Yourself Financially: Continuously seek to improve your financial literacy. Read books, follow finance blogs, or even consider attending workshops or seminars on personal finance.
  • Plan for Major Expenses: If you anticipate major expenses (like home repairs, a new car, or a vacation), start saving now. Creating specific savings goals helps to avoid the stress of last-minute financial scrambling.
  • Monitor Your Spending: Keep an eye on your daily spending. Small, impulsive purchases can add up over time. Use budgeting apps to track and manage your spending.

She advises consumers to seek financial advice if they find themselves in a crisis.

Debt counselling is a process where a debt counsellor assesses your outstanding debt and implements a restructured debt repayment plan.

Van der Poel explains: “The process can provide a structured way to pay off debts by negotiating with creditors to lower payments or extend terms. It also offers legal protection from creditors taking action against you while under debt review.”

Follow the link to read the full article: https://www.news24.com/news24/Community-Newspaper/Peoples-Post/make-informed-financial-decisions-in-2024-says-expert-20240109

Like Love Haha Wow Sad Angry

Thank you!

We look forward to the opportunity to get you debt-free!

Did you know?

You can start your application process already. Simply download your assessment or fill in our online application and get one step closer to becoming debt-free with Debt Rescue!

Subscribe to Our Weekly Email

By completing this form, you are providing Debt Rescue with the above personal information and acknowledge the terms of Debt Rescue’s Privacy Notice.