debt management

The new year is in full swing and our holidays are already starting to feel like a distant memory. But one thing will remind us of the expensive meals, generous gifts and new wardrobe items, our maxed-out credit cards!  It’s time to get back on track and regain financial health with these debt management tips.



Many of us have a six-week salary gap between December and January.  And we all spend more in December than any other month.  A double whammy smacks us into reality just about now, in mid-January. Luckily a bit of debt management planning and being smart can remedy the situation. Be informed: credit card debt is typically one of the most expensive forms of debt. Check what interest rate you are paying and negotiate with your bank. Some banks do offer personalised interest rates to clients which are based on your credit record, affordability etc.  It’s worth having a discussion with your bank with regards to reviewing your credit card interest rate.

You could also look into consolidating your debt into one facility, which is usually at a lower interest rate. Be aware though that you will probably be paying off the debt over a longer period. This will help with your immediate monthly cash flow, but in the long run you will be paying more interest (in terms of Rands paid towards interest) so this solution may not be ideal for everyone. Speak to your bank to get the right advice for your individual situation. Pay off the highest interest rate debt first. When planning your debt repayment plan, focus on settling the most expensive debt first – the debt with the highest interest rate. Remember to also consider debt like personal loans, store accounts etc.



Spend less – that’s an easy thing to say but good planning is required to make this work. Take your last few months’ bank statements and check what regular payments are coming in and going off. There are big expenses like bond repayments, short-term insurance, medical aid and more that are not negotiable and should not be skipped. Then there is the excess money that we use for those ‘nice to haves’: the nights out, lunches or that new pair of shoes. These are the expenses we need to look at cutting in order to pay off our debt. Some debt management experts recommend waiting a day or two before spending on luxuries. Maybe after waiting that day, those jeans won’t be as necessary as they seemed at the time? Bringing your lunch to work is also a good way of saving money, all these things add up. It’s a case of prioritising and moderation, if you normally buy a cappuccino with your colleagues every morning, stopping that altogether may make you feel left out. Rather consider cutting down, and have one every other day.



We all know we need to save – for retirement, for the next holiday or just for an emergency. Setting money aside at the beginning of the month, into a specific savings or investment account, will help with the discipline of saving. It’s so much easier than hoping for leftover money at the end of the month. Banks offer various savings and investment accounts that have no monthly fees and offer good interest rates that will help you with this. Set up a monthly transfer into this account that will ensure you put money aside and start that important savings culture. It’ll feel good watching it grow, trust me!

The most important thing about debt management is to just get started, so start the year on a good note and let’s get those finances sorted.


Contributed by Elize Giese, Regional Head of FNB Private Wealth

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