Happy girls are the prettiest…. They say! How do you begin to be happy when you can’t make ‘cents’ of your Rands? There are many unhappy women who are hoping to be happy one day, when they have more money. The illusion is that money can buy you happiness. ‘Many women find themselves paying today, what they bought yesterday by borrowing from tomorrow.’ This is according to Mr. Nicky Lala-Mohan, the Credit Ombud who believes that #debtfree girls are the prettiest.

With women contributing so much to the economy, Nicky Lala Mohan gives the following A-Z tips to assist women with finance and credit related matters.

A payment a month keeps the sheriff away!

It is important to avoid the number one credit mistake many women make which is skipping payments, making short payments or making late payments. This not only causes unnecessary harassment from creditors, it also brings down your credit score which may potentially put you in a position of being declined credit should you need it in the future. Paying the minimum required instalment every month will assist you in having a healthy credit score.

Budget for that Black Tax!

Black Tax is a term referred to the financial responsibility black people have towards helping their family members. It can sometimes be a never-ending trap if the family’s financial dependency does not come to an end. The truth is, you will not want your family members struggling or go to sleep on an empty stomach.

From renovating mommy’s kitchen to taking your nephews and nieces through university – black tax is what most women find themselves paying which is important to have a budget in place and set boundaries as to how far you can go with supporting family members. When you budget, you spend your money wisely.

Careful the credit seduction!

Did you know that for every R1000.00 you earn credit providers will extend credit of R3000.00? Credit can be very enticing and one might find themselves taking out things they don’t need simply because they are offered to us.

Credit can be very expensive, therefore, decrease the temptation by declining the credit limit increases and only taking out credit when you need to.

Due for a downgrade?

We are often presented with an opportunity to upgrade – be it cellphones, vehicles, lifestyles, etc. Sometimes, however, situations compel us to cut down on certain things. When you find yourself in a tight financial corner instead of borrowing to make ends meet, consider downgrading. You can downgrade from a big house to a smaller one, drive a cheaper car, not renew your cellular contract, cut on expensive brands of clothing, shoes and bags.

Excited by plastic money?

Many times we refer to store cards and credit cards as ‘plastic money.’ The truth of the matter is that plastic money is debt – and debt is expensive. Consider that the next time you’re about to swipe that card.

Finances on Fleek!

• If you do not have a steady income, save for the months that you will not get income.
• Understand your bank fees. If you feel you might be paying too much ask your bank for alternative options to reduce the monthly bank fees and costs.
• Keep track of your expenses, even the small ones.
• If you borrow, pay it back as quickly as possible.
• Investing is not just for the wealthy, start small – start today!

Greed + Over-consuming = Over-Indebtedness.

Our lack of self-control often lands us in trouble as women. The trick is to differentiate between what are essentials and what we can live without. We often get stuck in debt and financial anxiety because we want instant gratification.

How did I get here? Ignorance of your financial position is a recipe for financial disaster.

This question is usually a result of us wanting instant gratification. The long-term stress is just not worth it. We usually respond to enticing advertisements like: ‘you qualify for’ or ‘you have been pre-approved.’

Reckless spending can get you into debt.

Distinguish between needs and wants and consider saving for some purchases instead of taking out debt for them.

Incapacitated by debt? Seek Help!

There are options available for consumers who find themselves stuck in a debt spiral and need relief. The National Credit Act introduced debt counselling to assist consumers who are over – indebted. Debt Counsellors help restructure your debt by negotiating less payment amounts to help you survive. Debt counsellors also assist in a case where repossession of assets is about to take place.

Join forces with your partner/spouse towards a shared financial vision

Finances form a huge part of a marriage/relationship so it is therefore important for two people to share their financial goals in order live in harmony. Bad financial habits have the potential to choke any marriage/relationship to death.

Know your rights – The right to NOT remain silent

As women, and consumers in general, we have rights as set out in the National Credit Act. We are encouraged to exercise our rights when it comes to credit related matters. These rights include:

• Right to apply for credit – Every adult person has a right to apply to a credit provider for credit. Being granted the credit is however not an automatic right.
• Protection against discrimination in respect of credit – A credit provider must not unfairly discriminate directly or indirectly against a person applying for credit.
• Right to reasons for credit being refused – On request from a consumer, a credit provider must advise a consumer the reason for refusing to enter into a credit agreement; offering a lower credit limit; refusing to increase a credit limit; or refusing to renew an expiring credit card or credit facility. Too few consumers know about this right to make use if it when they are denied credit.
• Right to information in an official language – A consumer has a right to receive any document that is required in terms of the National Credit Act (NCA) in an official language that the consumer reads or understands e.g. Consumers who are not fluent in English could exercise this right, but unfortunately they don’t know about it and therefore they do not request the translated documents in their chosen language.
• Right to receive documents – Every document that is required to be delivered to a consumer in terms of the NCA must be delivered either in person at the business premises of the credit provider by ordinary mail; prepaid registered post; fax; email; or printable web-page.
• Right to access and challenge credit records and information – When a consumer requests a credit report, the report must disclose the same information that will be displayed to other parties when such report is provided. If the accuracy of the consumer credit information has been challenged by a consumers, the person whom the challenge has been made must take the steps set out in the National Credit Act within 20 business days after the filing of the challenge.

Live within your means

We all want the beautiful apartment in that upmarket suburb, that flashy car and those expensive shoes. Be mindful of your finances and how far they can stretch.

Making ‘cents’ of rands/debt

Understand how interests and fees are charged to avoid being overcharged. Shop around for the lowest interest rates.

Beware of adverts such as: ‘blacklisted welcome’; ‘loans available, not credit checks’ as these can be unregistered loan sharks (mashonisa) who charge exorbitant interests. Their collection processes are also illegal as they use methods such as repossession of ID documents and bank cards and/or violence.

When buying on credit, read the contract carefully for hidden costs and make sure you are paying for what you are purchasing. Make sure you receive a copy of any contract that you sign. Do not sign blank contracts with any credit provider.

No New Debt!

One of your financial goals should be cutting down on debt. Have a plan to close existing debt to free up funds.

Oops! I can’t afford that!

Even if it is 50% off; Buy one Get one Free; if it is not budgeted for and you will need to borrow (credit) for it, you cannot afford it. Many of these ‘specials’ may seem like bargains, but in fact are traps.

Pyramid – Ponzi perhaps?

Many times we are lured into ‘investment’ opportunities where we are promised high amounts of investments and in return we have to recruit people to join – at a fee. These are referred to as pyramid or ponzi schemes.  In most cases these schemes collapse resulting in many people losing their monies. The below points show us how to spot a pyramid or ponzi scheme.

• If it’s too good to be true, it probably is.
• If you are promised double or more than double your investment in a short period of time
• If you are urged to join fast before you ‘lose’ the opportunity.

Questionable conduct

Signs that read: “NO REFUNDS” “NO EXCHANGE” are illegal and should not be put up. Don’t be intimidated by these – instead – understand what your rights are as a consumer.

Retail Therapy? I think not!

If it’s not in the budget, it should not be in the shopping bag.

Saving, the latest trend.

No matter how little you think you earn, SAVE!

Set short, medium and long-term financial goals.

Tighten that ‘figure’ belt!

• Did you know that you can save R5 796 a year just by cutting out the daily coffee you purchase? If a coffee is R23.00 you spend R483.00 per month which results in R5 796 – Just on coffee! The same may apply for lunch, takeaways, etc.
• Do not shop on an empty stomach as you will be tempted to purchase food at restaurants not budgeted for.
• Make a grocery list when you go shopping and stick to what is on the list to avoid overspending.

Unforgivable sins

• Borrowing from Zodwa to pay Amanda? Stop that! The quickest way to find yourself in a debt spiral is taking debt to pay debt. Whenever you find yourself overwhelmed with debt – stop borrowing.
• Trying to keep up with Fundiswa is a No No! Many times, we compare ourselves with our peers and end up straining ourselves financially because we are trying to keep up.

Value your money

Respect your money. You spend days – sometimes nights-  at work or running your business to make money. Value it. Don’t use it anyhow or have no sense of knowledge where your money goes. Keep track of your spending no matter how small.

What’s in that purse?

Ladies, having 3 or 4 credit cards, store cards, etc, is not the ‘in’ thing. In fact, the more store and credit cards you have, the more you are paying on interests. Cut down on the cards – literally – with a scissor!

No Xcuses!

Whatever improvements and adjustments you have to make to your financial life – start now! We always make excuses like: ‘if I can get more money’ or if I can just get another loan.’ These excuses are what delay our progress as women. Start now – No Xcuses!

Yield towards improving your financial lifestyle

It is always best to have a handle on your finances from keeping slips, to checking bank statements, to viewing your credit reports.

Be Zealous about financial/credit knowledge

With so much information available out there – there is no reason why women should not be financially smart.

 

Consumers can contact the office of the Credit Ombud for FREE assistance if they experience any issues relating to credit agreements with non-bank credit providers such as the clothing and furniture retailers as well as micro-lenders, fraudulent listings, emolument attachment orders (“garnishee orders”) or general complaints about their credit bureaux listings. The office can be contacted on 0861 66 28 37; on the website www.creditombud.org.za; email us at ombud@creditombud.org.za or send a sms to 44786 and we will call you.

 

 

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If you would like more information about this topic, please contact Salem Dyafta , Public Relations Manager at 0792243802 or email at sdyafta@creditombud.org.za.