KwaZulu-Natal MEC for Finance, Ms Ina Cronjé urges people of KwaZulu-Natal to spend their money wisely this festive season. Cronjé says that “It is that time of the year where we are easily tempted to spend what we don’t have and we end up drowning in debt. An average household in South Africa spends 78.2% of their disposable income on debt repayment”
“That means that if your family income is R3 000 per month, you are likely to pay R2 346 on debt repayments. It is VERY expensive to borrow money because you have to pay back the money plus interest and you end up paying more than the money you have borrowed” she says.
Cronjé also says that people must be aware of loan sharks and easy money that comes sometimes in a form of tempting pyramid schemes, there is nothing like easy money, you must know by now that easy come easy go.
“Do not let your family members, friends and colleagues to get you into trouble by exerting pressure to you to buy them presents that you did not budget for, ending up borrowing money that you do not have a plan of paying it back” says Cronjé.
Cronjé says “We must distinguish between good debt and bad debt. It is good to borrow money for a home loan or renovations/maintenance on your home, getting student loans to attend college or university, applying for a business loan and borrowing for business if you have a plan to pay it back”.
“But it is not wise to borrow money to buy presents, for an expensive sound system to impress your friends, or just yourself, to throw parties or buy fancy clothes, to go on holiday or buying alcohol” she says.
It is wise to protect what you have first, put money away (in a bank, stokvel, retirement annuity, etc) and to spend less and use money to pay debt faster, e.g. paying off your grand child’s study loan or other loans
Take time to decide what you are going to do with the extra cash that you get as an annual bonus and/or stokvel payment. Choose a safe place when separating your Stokvels.
“Let’s get into the habit of saving before we start spending. With the reports in the media that recovery is expected to slow next year, it is even more imperative that we save at all levels. The secret to a world free of debt and a better future for us and our children lies in SAVING and it is in that spirit that we wish our citizens a Merry Christmas, best wishes for happy holidays and a magnificent new year” says Cronjé.
Enquiries:Ntokozo Maphisa
Cell: 082 773 0937
