Real Estate Investor Magazine South Africa November 2016 | Page 26

FINANCE

Protecting your Finances
in a no-growth economy
Finding Stock to Sell
BY SHAUN RADEMEYER

W

ith the economy now expected to show
zero growth this year and the threat of a
junk status rating on the horizon, times
are tough for the average consumer in South Africa
and many households are taking strain.
So what can be done to ensure that you can hang
on to your existing home – or perhaps even become a
homeowner for the first time?
“Now is the time to go through all your bank and
card statements, monthly bills and payment records
to find out exactly where you stand financially and
what options you have,” says Shaun Rademeyer, CEO
of BetterLife Home Loans, SA’s largest mortgage
originator.”
“This is not the time to avoid the issue if you have
too much debt and too little income. You need to look
at your situation honestly and urgently take whatever
action is necessary to improve it.”
To get rid of debt, he says, consumers should start
by eliminating any further credit card spending and
reducing the outstanding balances as fast as possible.
“Credit card debt usually carries the highest interest
rate and compounds faster than anything else, so our
advice is always to use credit cards only for absolute
emergencies, to avoid carrying them around so they
can’t be used for impulse buys, and to use any spare
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NOVEMBER 2016 SA Real Estate Investor

cash you have to first pay off existing credit card debt.
“Next on your list to pay off should be any personal
loans you have, after which you should systematically
address any store card balances and any car loans to
get rid of them as soon as possible.
“You might also want to consider whether it is
worth switching from high-cost debt to lower-cost
debt by consolidating all outstanding amounts into
your home loan. But remember, you will then be
increasing the risk of losing your home if you can’t
afford the bigger loan instalment each month, and
you will still need the discipline to stop incurring new
debt.”
Alternatively, says Rademeyer, if you are managing
to cope with your debt but are finding it really difficult
to save, you should make it a habit to pay cash or by
debit card only for regular purchases such as groceries,
as this will help you keep more accurate track of what
you are actually spending and stick to your budget.”
Other strategies for making sure you have more
money than month include using public transport
as far as possible or car-pooling to work, moving to
cheaper accommodation if you are renting, eating and
entertaining at home instead of in restaurants and
malls, watching your water, electricity and cellphone
usage, and even making a resolution to buy nothing
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