• September 24th, 2018
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Know and be guided by your debt says FNB

Business & Finance
Business & Finance

Windhoek “Most of us who follow the news are aware that 2016 is bound to become a tough year, not only because of the value the rand, and by default the Namibia dollar, has lost but also because of the the drought, which will affect food prices. We are further looking at interest rate hikes, so it is best to get on top of your finances now, and not later in the year when things might spiral out of control,” said Martha Murorua, FNB Executive of Consumer Banking. After the holidays and with back-to-school expenses many start the year indebted. “While it is possibly easier to apply for another short-term loan or increase your credit limit than it is to take responsibility for your spending, this will quickly result in serious financial difficulties,” warned Murorua. “The need to spend wisely is a reality, and due to the tough economic climate, companies may cut down or not pay out bonuses. Consumers cannot rely on additional incentives to pay off their debt.” Furthermore, Murorua cautioned that it seemed as if many people were not aware of what was coming in and going out of their bank accounts. “Without scrutinizing your income and expenses, there is no way to really understand if you are able to make your monthly payments, and most importantly where you can cut down. Make sure that the money that goes out of your account at the end of the month, is less than your income,” warns Murorua. From this you will be able to draw up a budget for the upcoming months. She says that an analysis would soon highlight what expenses are necessities, such as bond repayments, upcoming school fees, university fees, emergency needs such as a funeral of a loved one, but it would also show where you would be able to cut down “This may mean some hard choices for the next few months as cutting down on unnecessary expenses is the only way to get on top of debt and this could mean for example staying at home and not eating out as much and staying away from shops and the temptations.” There are also ways of cutting expenses indirectly, such as making an effort not to use excessive water and electricity to bring down municipal bills or carpooling to save on travel and fuel costs. “Make sure that every dollar you spend in the next few months is necessary. Pro-actively plan your shopping by drawing up a shopping list, which will help you avoid unplanned spending,” suggests Murorua. Lastly Murorua encouraged people to talk to their bank. “Talk to your bank if you think there may be difficulties on the horizon - the sooner you pick up the phone the better.” She further warns that people need to understand the cost of their debt. “Never wait until it becomes a crisis as you are then bound to make irrational decisions to borrow at extraordinary high interest rates. The banks can assist you to restructure your debt, before you are forced to do so by collectors and attorneys, resulting in you possibly getting a bad credit record. The bank may be able to assist you by putting your credit card repayments on a budget plan, or re-looking the terms of your personal loan. Taking responsibility for your money will help you get through 2016 financially.”
2016-01-25 14:36:26 2 years ago
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