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Red Flags That Could Mean Doom for Your Money

Many people say that they feel surprised when their finances come undone, but there were warning flags that this was going to happen before you lose control.

financial trouble

If you are able to spot these red flags of impending financial trouble then you might be able to stop it before you end up in a bad financial situation. Here is a look at some of those warning signs that could spell financial trouble in the hopes that you can turn it around.

Your Credit Card Repayment Each Month is in High Triple Digits

If you are paying more than R1000 a month to cover your minimum monthly payment then you probably have too much credit card debt.

If you want to make progress on your balance and stop it from growing bigger then you need to pay well above the minimum amount that you owe. However, if you already owe so much on your credit card and you are struggling to pay the minimum then you may find it hard to get some extra cash. This means that your card balance could easily get out of control. If you are not able to afford more than the minimum then it could take years for you to pay off your balance.

You are Charging Groceries and Petrol and Not Paying It Off

People are using credit cards more and more instead of using cash and debit cards to pay for everyday essentials. This is essentially so that they are able to take advantage of credit card rewards.

However, if you are not paying these expenses off each month in full then it could be that your living expenses are more than your income and you don’t have a financial cushion for your regular expenses.

The use of credit cards for everyday purchases should only be undertaken if you are financially able to pay off the balance for these in full each month.

You Keep Going into Your Savings

If you are constantly going into your long-term savings in order to make ends meet or to pay for unexpected expenses then you may not have enough liquidity to truly pay for a financial emergency.

Ideally, you will want to have at least 3 to 6 months of living expenses saved in an emergency fund to cover an unexpected expense or a job loss. However, it’s a sign that your finances are in trouble if you find that you are using your emergency fund or other savings for expenses beyond your budget.

Don’t stop reading…more warning signs below…

You Often Pay Bank Fees

If you often end up paying for preventable bank fees like out of network ATM fees, late fees or overdraft fees then it could show that your finances are disorganised and are threatening your financial health.

Your Retirement Account Isn’t Growing

If you invest smartly and contribute regularly to your account, your retirement fund should grow significantly each year.

retirement fund

However, if you notice that your numbers aren’t really shifting then you may need to take another look at your investment strategy or you need to look at contributing more to account.

Your Income isn’t Growing

Your savings should be growing every year and so should the total amount that you take in. If your income is holding still then it could mean that you are not performing as well in your career or are not taking enough risks. Also, keep in mind that if your salary doesn’t at least keep pace with inflation then your salary is actually shrinking.

If you have noticed any of these things then you need to take a look at your finances and restructure your budget to fit with what your current financial situation is before things get any worse.

How You Can Live Within Your Means

Living within your means, means that you spend less or equal to the amount of money that you bring in each month. This is usually a lot easier said than done for many of us. This is because loans, credit cards, savings and even your emergency fund allow you to spend more on things that what your income would normally allow you to.

live within your means

However, this is not a sustainable lifestyle and eventually, your frivolous spending will catch up with you. Your savings and your access to lines of credit will run out and you will then have to make drastic changes or you could face financial ruin.

Here are some key steps to be able to live within your means and avoid racking up the debt.

What Do You Make?

The first thing that you will need to do in order to live within your means is to know what your means are. You will need to know what your net income is, which appears on your paycheck. Also, you need to know how often you get paid, is it every month, every week, every 2 weeks and so on. Most of your bills are paid monthly, so you will need to know what you get paid each month.

Once, you have determined what your means are each month, you will know exactly what you have to work with.

Spend Less

Now that you know how much you make, you will need to focus your efforts on reducing your spending so that it fits your income. Use a budget to plan your expenses as well as to keep track of your spending. If you have tried the budgeting tool before and it didn’t work for you, then you need to try it again. Often, you will just need to make some minor changes in order to get your budget to work.

You can also try a method called backwards budgeting, which is where you write down your income and then subtract each expense that you pay each month. If at the end you have a negative number then you are spending too much.

Give Your Income a Boost

If you have got your expenses down to the absolute minimum and you are still spending more than what you earn, then you need to look at ways you can boost your income.

Make sure that you are claiming any benefits that your employer offers and that you are signed up for the right health and disability benefits. You can consider changing jobs to a higher earning one or you can look at picking up a second job in order to make ends meet.

The fact is that you need to look at ways where you can make enough money each month to pay for all your necessary expenses.

Don’t stop reading there are still more ways you can learn to live within your means…

Avoid Relying On Credit

You need to stop relying on your credit cards to meet ends meet as this shows that you are not living within your means. In your budget, you need to leave out all your credit cards and loans as a way to make your expenses.

Any type of credit has to be paid back, so if you are relying on these then you will end up in a cycle of debt as you will pay your balance off, then reuse it to make your necessary expenses and so on. You need to stop the cycle and the debt and learn where you can make cutbacks and live with what you have.

Stop Keeping Up With the Joneses

You have to resist that pressure that you need to have the same material things as those that are around you, that you see on television or even on social media. You might be able to fake wealth through loans and credit cards, but this is only for a short period of time and you will end up paying for it later and you will be paying more.

debt

Save Rather Than Credit

Many of us will use our credit cards to make large purchases that we are not able to afford straight away like a new TV. However, instead of using your credit card for these buys, rather put some money aside each month and once you have saved up enough you can buy the item without having to go into debt. If you are not able to put money aside to save then you can’t afford the item at all.

Have the Crucial Emergency Fund

When you have a savings account that is solely for emergencies, you will be able to pay for any financial emergency that may arise without having to use your credit cards. Your emergency fund should at least be 3 to 6 months of your living expenses, but even having a few thousand in the fund will help with some minor emergencies every now and then. Something is better than nothing.

Living within your means can be difficult, especially if you have relied on credit cards and loans in the past to pay for things, but this will just lead to financial issues later down the line. You may have to make difficult changes, but it is worth it as you will not be trapped in debt and you will become financially savvy.

How Does a Debt Consolidation Personal Loan Work?

A great solution to high interest debt is a debt consolidation personal loan. You are able to use these types of loans to pay off any type of debt that you may have, from unsecured loans to credit card debt. Even though a debt consolidation personal loan is a great finance management tool, it won’t be for everyone, so you will need to carefully consider this option and weigh up both the advantages and disadvantages before you take on this loan.

debt consolidation

What Exactly is a Debt Consolidation Personal Loan?

Debt consolidation is where multiple debts are taken and are made into just one. You are able to do this through personal loans, credit card balance transfers and mortgage loans. Money that you borrow for the purpose of paying off multiple debts is considered a debt consolidation loan as you will have one payment to make instead of several.

Specifically, a debt consolidation personal loan is a personal loan that is used to pay off debt. A personal loan can be applied for at a bank or an online lender. You will fill out an application form and your income, credit score etc. will be analysed before a personal loan is granted to you.

The benefit here is that a personal loan will usually have a lower interest rate than a credit card, but the interest rate will be higher than a car loan or mortgage because it is an unsecured loan. This means that there are no assets that can be repossessed by the lender if you fail to repay.

The Advantages of Debt Consolidation Personal Loans

There are a number of advantages to debt consolidation personal loans that you should take into account.

Firstly, you are able to use this type of loan to consolidate numerous payments into one, which will make your debt easier to manage and you are less likely to forget a payment which would incur late fees.

Secondly, you will be able to save money on interest as a personal loan generally has a lower interest rate, so transferring your high interest debts to this type of loan saves money.

Thirdly, your debt repayment will generally be lower than what you are currently paying with your existing debts.

Lastly, a personal loan will usually have a fixed payment and term, which means you will know exactly what you will need to pay and how long you will be paying the debt off for.

You might be wondering how and where you can get a debt consolidation personal loan from…

How to Get a Debt Consolidation Personal Loan

The first thing that you will need to do is to determine how much debt it is that you want to consolidate. You will need to add up all of your high interest debts that you want to be free from and gauge the amount that you owe. You are then able to apply for a consolidation loan for that amount.

However, applying doesn’t mean that you will get the loan as the lender will take into account various factors before granting the loan. You will usually need to have a decent credit and income in order to get a low interest rate loan, but you will find lenders that give personal loans to those with bad credit, but you will still need to have an adequate and steady income in order to get the loan.

If you are approved for the loan then you will receive the terms of the loan, which will include the amount that you will need to pay and for how long as well as the interest rate and fees.

Once you know how much the loan will cost you, you will need to compare it to the cost of paying off your debt without the loan. If you determine that you will save money by taking the debt consolidation personal loan then you can accept.

The lender will then issue you with the money that can then be used to pay off the debts. You will need to create a budget and avoid incurring debt again once you have paid off your debt.

Where to Apply

You are able to apply for a personal loan for debt consolidation at your local bank, but the approval criteria is pretty strict so you will need to have good credit and adequate income.

apply for a debt consolidation loan

If the bank is not an option for you then you can consider online lenders. There are a number of online lenders that offer personal loans that you can use how you like, including debt consolidation.

The approval process with many of these lenders is less strict than a bank and they offer faster approval. With online lenders, you will generally only need to fill out an online form and may need to email or fax certain documents like your payslip as a proof of income.

Once, the online lender is sure that you can pay the loan back they will transfer the money to your bank account. There are even online lenders that will not run a credit check on you and will only look at your ability to pay the loan back.

If you are still struggling, you can seek the help of a debt counsellor that will help in managing your debt with you, by creating a budget and a debt management plan, where you can start paying off your debts.

A debt consolidation personal loan is not for everyone, but it is a viable option for those that are struggling with multiple high interest rate debts as you will be able to pay these off and only pay for the personal loan that will have a lower interest rate and monthly repayment. It is important not to incur any other debt during the process and to ensure that you are able to afford the debt consolidation personal loan and that it is cheaper than what you are paying currently.

Choosing Between Debt Consolidation and a Balance Transfer

It is never easy to pay off debt, but your load can be lightened when you have smaller payments and a lower interest rate.

With common debts like personal loans and credit cards, two ways that you are able to lower your rate is by debt consolidation loans and balance transfers.

So, what is the difference between these two and which one is the best route to go down? Both debt consolidation loans and balance transfers have advantages and disadvantages, so you will need to make an informed decision and understand the fees, your debt and everything else before you dive into one of these options.

Let’s take a closer look at both of these options.

Balance Transfers with Credit Cards

A credit card balance transfer is where you transfer your debt to an existing or new credit card. This can be an attractive option if you know that you are able to pay your debt off quickly.

credit card balance transfer

The idea is to move the debt to a card that has a lower interest rate or what would be better is it offers a 0% interest rate on your debt for a certain amount of time. When you are able to eliminate the interest, your loan balance will stop growing and every cent of every payment that you make goes directly to reducing your debt. However, you must read the fine print.

You will need to find out if you will need to pay a fee to transfer balances. These costs can be a percentage of the amount that you transfer or they might charge you a flat rate which can be more. Any savings that you are able to make with a lower interest rate need to more than cover any transfer fee. Also, if you open a new credit card, you might be also taking on a new annual fee.

When it comes to interest rate those that have good credit will be offered the best interest rates. If you see tempting offers then you will need to do your research and see what the card issuer will actually offer you once they have reviewed your credit. If you find a 0% APR card then you need to check the small print and find out how long the offer lasts. You need to check when the rate will change and what happens once the promotional period ends.

Balance transfers can be tricky because they are not really bad for your credit, but they can cause problems. This is because every time you apply for a new card, lenders will look at your credit history and any enquiry will put a dent in your credit. Your credit score can also be lowered by having too many consumer accounts like credit cards open. If you are going to use a credit card to transfer balances then you need to make sure that you use it as a debt pay off tool and not a way to increase your debt. You need to avoid using the card that you have paid off as this will just drive you deeper into debt.

So…what about debt consolidation? Keep reading to find out more…

Using Debt Consolidation

An alternative option to using credit cards is to use a personal loan for debt consolidation. If you are able to get a large enough loan then you may be able to combine several loans into one so that everything is one place. Debt consolidation loans usually come with a fixed interest rate, which can make more sense when credit card promotional periods are too short for you to pay back all the debt.

debt consolidation

You may pay upfront fees for debt consolidation, but you also may not. There are some loans where the costs are obvious and include things like processing or origination fees. With other loans, the costs may seem invisible but these are actually built into the interest rate.

You will then need to compare multiple loan offers so that you can find a combination of fees and interest charges that will benefit you.

When it comes to the interest rate charged on a debt consolidation loan it will depend on the type of loan that you use. A personal loan that is unsecured will have a higher interest rate than a secured loan, for instance. However, you will still most likely pay an interest rate that is lower than your credit card.

If you believe that your debt will take several years to pay off then you will probably benefit from a debt consolidation loan. You will find both variable and fixed interest rates for these loans. Fixed rates make it easier for you to plan and budget as you will know exactly what your monthly payments will be for the term of the loan.

New loans also create enquiries like credit cards, which can then impact your credit score in the short term. In the long term though some debt consolidation loans could be better for your credit then balance transfers.

Generally, your credit score will be higher when you have a mixture of different types of credit and instalment loans as you look more attractive than a borrower who relies mainly on credit cards. If you are a heavy credit card user then it may appear that you are spending beyond your means and this is not sustainable.

Taking a debt consolidation loan can show that you have made a commitment to paying down your debt and that you have used the right type of debt for that purpose, which translates into you being a savvy borrower, that can show that you are likely to repay other loans in the future. Your credit will strengthen when you make payments on time and only take on debts that you are able to afford.

You might be wondering about how collateral works…

What About Collateral

There are some debt consolidation loans where you will need to pledge collateral, which means you give the bank or lender permission to take your assets and sell them if you fail to repay the loan.

Pledging collateral can help you to get approved, but it is also risky. If things don’t go to plan you could lose your home or your car. You should keep unsecured loans, unsecured as you will only be risking your credit.

If you use a home equity loan, for instance, to pay off an unsecured credit card debt, your risk dramatically increases, because if something you hadn’t planned on happens then you could lose your home.

collateral

If you already have debt that is secured by collateral, you can consider refinancing these loans separately. You can use a balance transfer or debt consolidation for unsecured debts and get a different loan for your secured debts. However, you are able to turn your secured debts into unsecured debts by paying off your secured debts with an unsecured loan, for instance, which will reduce your risk, but you need to make sure that it is worth any additional costs.

Using a balance transfer can work if you are able to pay off your debt quickly, but a debt consolidation loan will make more sense if you believe that it will take you years to pay off your debt. With both of these, you will be moving all your debt into one so that you have one monthly repayment to make and only one interest rate to manage, which can help with your cash flow. You just need to avoid creating more debt so that you can become debt free.

Budget Hacks to Make Your Life Easier

You can exercise more control over your finances by having a working budget. A budget is a great tool to have to gain control over your finances and turn your situation around. There are many people that believe budgets don’t work as they take too much time or they keep making mistakes. Budgets do take work, especially in the first few months because you will need to adjust to your new spending habits. However, here are some budget hacks that will make sticking to your budget much easier.

 budget

Use Cash for Problem Categories

If you don’t really like tracking your budget each day then you may want to think about switching to cash for categories where you usually go over. Common areas are entertainment costs, groceries and clothing.

It’s a good idea to take the money you have budgeted for these categories out of the bank at the beginning of the month and divide the cash into envelopes for the various categories. Once the cash has run out then you know you need to stop spending. Keep the receipts so you know what you have spent the cash on. With groceries, you can divide the cash further like have an envelope for each week of groceries and this way you won’t be running out of food in the last week of the month.

This will also make you more aware of how you are spending your money as cash is a lot harder to separate from than just swiping your card.

Use Your Phone for Budgets

It is much easier to stick to a budget with budgeting software. You are able to download budgeting software to your smartphone, which means you are able to enter transactions as you go. The software usually allows you to create a category and assign a certain amount to each of these. Once you enter the transaction into the appropriate category, it will tell you how much you have left in the category.

This can help you to avoid mistakes and if you are married and are both spending money in the same category then you can keep track a lot easier. Entering transactions as you do them will help you to save time.

Wait…There are more budget hacks to know…

Sit Down and Review

A great way to get your budget working is to have meetings about it and this is a necessity if you are married. This is where you look at your spending habits and review the changes you can make. You should do this at least once a week. These reviews only take a few minutes to do but at first, they may feel like a chore, but it is worth it. Also, your weekly review will take less and less time as you get better at budgeting. You need to know where your money is going and how much you have left each month.

Making the Cuts

If your budget shows that you don’t actually have enough money to cover all your expenses then it’s time to determine where you can make the cutbacks. Finding extra money by making cuts can make a huge difference.

You can shop for a new cell phone plan, internet provider and insurance, but you can even save by just doing simple things like turning off lights in a room you are not using, stop buying that morning takeaway coffee, think before you buy clothing and make sure you don’t have something similar that is lurking in the back of your cupboard and other such things as they will save you a bit of money. Making cutbacks or finding ways to reduce your bills and spending can make sticking to your budget easier.

Save on Groceries

One of the major problem categories for people is groceries and many of us overspend in this area. Fast food and eating out is easier, but this will soon add up. A trap that many of us fall into is buying our monthly groceries but then still getting take away and eating out too often, so we are just spending more. Cooking food yourself is definitely cheaper and you will save money, but it can be difficult to save on your food budget.

food budget

One hack that you might need to save on your grocery bill is a menu planning service. These type of services will put together a list and provide you with new recipes each week. This can help you to stop eating out and wasting food.

Also, when you are going shopping look for specials and discounts on products that you use even if it’s not the brand that you use, because these small savings can add up. Take a little time to compare products and prices so you can save.

Sticking to a budget can be difficult and many of us are prone to impulse buys, but if we just take a moment to think about the purchase and how it would affect our money we will think twice. You can make life easier with a budget and by using the hacks above.

5 Tips for Staying Debt Free

Not only do you want to become debt free, you will also want to stay debt free in the long term. You will need to adjust your spending habits and only learn to live within your means so that you can get out of debt and stay out of debt.

debt free

Here are 5 tips for staying debt free

Use Cash

When you use cash to pay for things it forces you to only spend the money that you have and if you don’t have the cash then you can’t afford it. Credit cards should only be used when you are 100% sure you can pay it back in full each month. If you are not able to control your credit card spending then you should get rid of them.

The Power of Negotiation

You do have the right to negotiate, but not many people are aware of this. You should shop around for the best deals and you will find that prices are competitive. Suppliers will not just match their competitors offers they can better them. So ask for a better deal than what is on offer and see what you can save.

Get Your Free Credit Report

You are allowed to get one free credit report each year. This report will show you how often you have applied for credit, the amount of debt you are in and you will be able to see if there are any mistakes or if there has been any fraudulent activity. Your credit report is useful because you will get a better understanding of your finances and see where you will be able to improve.

Paying Your Creditors

You will need to keep up to date with your monthly payments to creditors, which includes your credit cards, utility bills, store cards and other financial obligations that you may have. If you start to fall behind on these payments, it can be hard to catch up. You should have at least three months of your salary saved for any unforeseen occurrences, emergencies or if you lose your job.

Face Your Debt

If you have uncontrollable debts, then you can’t hide from them in the hopes they will disappear. You need to face your debt and you can seek advice from a debt counsellor. They will be able to help you find the best way to pay off your debt.

In order to be debt free, you will first need to tackle your current debts and become wiser about how you spend your money, like by shopping for deals or determining if you really do need a particular item. Once, you have cleared your debts stick to your budget and continue to be debt free.

3 Smart Ways to Use a Personal Loan

Personal loans are great as you are able to use the money that you receive anyway that you like, but here is a look at 3 smart ways to use a personal loan to help you save money, pay off debt and build a better financial future.

paying debt

Better Interest Rates Means You Can Save Money

If you have a high interest loan or credit card and are having problems making the repayments or believe that you will never get on top of the debt and be debt free then a personal loan could help you. If you are able to obtain a personal loan that has a significantly lower interest rate then your current debt then you are able to save money.

If you can get a personal loan with a lower interest rate then you are able to use the personal loan to pay off your high interest debt or credit card. You will be saving on interest so that extra money can go towards paying your personal loan.

Reduce Credit Card Debt

Let’s say that you have charged an expensive purchase to your credit card and believe that you will be able to pay it off by with your next paycheck, but it didn’t happen and you are making monthly payments each and every month. This happens a lot because credit cards make it easy for us to spend money and forget about it, but you just end up in the cycle of making minimum monthly payments. These repayments can drag on for years without an end in sight. Personal loans, on the other hand, have a set end date.

Personal loans are instalment loans, which means there are a number of fixed repayments that are made for a fixed period of time. It might be an idea to then use a personal loan to pay off your credit card debt and pay the personal loan per month knowing that there is an end to the debt.

Improve Your Credit

You can use a small personal loan strategically to improve your credit and build a better credit score.

Firstly, a personal loan shows variety on your credit report, which is important as credit score evaluations take into account the different types of credit you have. You need to have a mix of revolving credit like a credit card and instalment accounts like a mortgage or personal loan. Having this variety shows lenders that you are able to handle credit and debt responsibly.

A personal loan is also able to help to improve your credit history by reducing a high debt usage ratio. Part of your credit score is determined by the ratio of available credit to the balances you have on those accounts.  If you have a credit card, for instance, that always carries a balance that is more than 25% of the available credit then you are hurting your credit score. A personal loan can be used to pay off part of your credit card debt, which will then reduce your debt usage and improve your credit score.

A personal loan can be used in a number of ways that can actually help you financially. You need to review your credit card balances, debts and interest rates to see if a personal loan can help.

Manage Debt, Big or Small

We all have some type of debt that needs to be managed. If your debt is small then ensure that you keep on top of your payments so that it doesn’t spiral out of control. If your debt has already built up and is quite large then you will need to put a lot more effort into paying it off. If you want to manage your debt then take a look at these tips below.

debt

Know What You Owe

You can’t start to pay back your debt until you know what you owe. Make a list of all your debts, which includes who the creditor is, the amount of debt, what you need to pay each month and the due date. You can confirm each of these debts by using your credit report. This will give you the overall picture of where you stand with your debt and allow you to be aware of what you owe.

You need to refer to your list of debts regularly, especially as you pay bills and every couple of months update your list as the amount that you owe changes.

Remember to Pay your Bills

Paying off your debt will only get harder if you are late paying or miss a payment as you will be charged a late fee for this. If you miss two payments consecutively then your finance charges and your interest rates will increase.

Use your computer or phone to create a calendar of when your bills need to be paid. You can enter your payments there and set an alert several days before the due date to remind you to pay. If you do miss a payment then don’t wait until the next due date, rather pay as soon as you remember to avoid it being recorded to a credit bureau.

Keep a Calendar for your Bills

You should use a bill payment calendar to help you determine which bills to pay with which pay check. Your calendar should contain each bill payment next to each due date. Fill in the date of each pay check. If you get paid on the same days each month then you can use the same calendar month to month, but if you get paid on different days each month then you should make a new calendar every month.

The Minimum is Better than Nothing

If you are not able to pay more towards your debt, you need to make at least the minimum payment. The minimum payment will not really help you to reduce your debt, but it will stop it from growing and ensures your account remains in good standing.

Missing payments will make it harder for you to catch up and your accounts may end up going into default.

Keep reading to find more ways to manage your debt…

Prioritise Your Debts

You will need to prioritise your debt, meaning you need to decide which debt you will pay first. Tackling your credit card debt first is a good idea as this form of debt will usually carry a higher interest rate compared to other debt.

You can determine, which debt to pay first by referring to your debt list. You can decide to pay the largest debt first or you may feel more motivated to start with a lower balance as this will drive you forward to tackle bigger debts.

pay off debt

A Fund for the Unexpected

If you don’t have access to savings then you will need to go into debt to cover an emergency expense. Even having a small emergency fund in place will cover little expenses that come up.

Set a small emergency fund goal and once you have reached this, you can aim towards a larger fund. Eventually, you will want to have an emergency fund that covers at least 6 months of living expenses.

Time to Budget

A budget is a vital tool for everyone with debt. You need to ensure that you have enough money to cover your monthly expenses and you can use a budget to plan ahead so you can take early action if you think you won’t have enough money for your bills.

Also with a budget, you can plan how to spend any extra money like putting it towards debt so you pay your debt off faster.

Do You Need Help?

If you are finding it hard to pay off your debt each month then you may need help from a debt relief company or you can consider debt consolidation. You will need to weigh up your options and choose the path that is most suited to you and your financial situation.

Debt can easily get out of hand and if you are suffering with a lot of debt then you need to take action, make a plan and stick to it and if you are struggling then you can seek advice from debt counsellors or consider another form of action like debt consolidation so you only have to pay one payment each month to pay off your debt.

Tips to Stay Out of Debt Over Christmas

Christmas is an expensive time of year, but that doesn’t mean you have to go into debt to be able to afford the holiday season. Christmas can easily get out of hand, but isn’t it the season about spending time with your loved ones instead of spending thousands.

Here are some great tips on how you can stay out of debt over Christmas.

Stick to Your List

One way to easily overspend over Christmas is to buy on impulse and have no clear indication of what you are getting. You should make a list of possible gift ideas, you just need a few ideas for those that you are buying for. If you see one of the gifts for a good price then you should get it. The list is like your budget and you need to stick with it.

Start Early

It might be too late to start shopping early this year, but these tips will help you every year. You can start hunting for the gifts on your list early and if you find a good deal, you can buy it and cross it off your list. Starting early to look for gifts means you can take your time and hunt for the best price.

Wait for It

Even though it is a good idea to start shopping early, it might be wise to wait it out as well. Retailers are highly competitive and just because something is on sale now, it doesn’t mean it won’t be cheaper just before Christmas. Some of the best deals might be weeks before Christmas or just days before. However, waiting can lead to panic buys, so the best thing to do is to watch online sites and websites and see when those big-ticket items you want go on sale.

Buy Less

Instead of buying lots of things without much thought, you should buy less and also buy more meaningful gifts. There is the 4-gift rule that works for kids but can also work for adults. That is, you should get:

  • An item they want
  • An item they need
  • An item to read
  • A wearable item

Something to read is usually inexpensive and something they need can be as well like you may always need hair ties, for instance, and something to wear can even be something you make yourself.

Wait…There are more ways to save over Christmas…

Handmade Gifts

Do you have a hobby like knitting or sewing? Can you bake? If you are crafty you could make a gift for your family and friends like make a scarf or create a baked goods hamper.

Making a gift yourself is more meaningful and thoughtful. If you do make your gifts try and stick to one thing so you can buy your supplies in bulk and save money.

Put Money Away

Starting next year, you should put a little money away each week or month. There is the 52-week challenge for instance that starts around New Year’s Day. This challenge is where you put R10 away the first week, R20 the second week, R30 the third week and so on. However, you have to be disciplined for the challenge.

If you not able to do this, then you can just start putting a portion of your paycheck away each month and watch it grow so you are ready for Christmas.

Use Your Credit Card Rewards

Reward credit cards can be very useful if you know how to manage them. You can use your credit card that accumulates rewards like points to pay for everything and just transfer the money from your check account to settle the amount. You can use these points to buy gifts at selected stores.

Create Your Budget

Budgets are not fun, but they are needed as they make you more money conscious, especially around Christmas. You need to figure out how much you want to spend on each person and how much the main gift should be. This can help you to not overspend, because you have a clear guide of what you will spend.

Give Less

If you have a large family, it can be expensive to buy a gift for every single person. You should then suggest that you give less. You could set a limit on the amount to spend and just get one gift for the whole family with that amount or per couple, for instance. Otherwise, you can suggest a smaller amount per person and everyone has to buy within that limit.

Christmas can be pricey but you don’t have to go into debt for it. Look at how you can save money, spend less and plan for next year so that you know you will be able to get through the holiday season with your financials intact.

The Dos and Don’ts of Your Credit Card Over the Festive Season

The festive season is upon us, which means it’s time to shop. Many of us use our credit cards over this time, but using your credit card for all your holiday purchases can easily lead to a debt hangover when the new year hits.

You are able to make your holiday shopping experience smoother by using your credit card responsibly and knowing what you should avoid.

Festive Season Credit Card Dos

Know Your Credit Card Rewards

There are a number of credit cards that offer rewards when you use them. This can be in the form of cash back, discounts at certain online stores and points that you can then spend at specific stores. You may have been earning these rewards throughout the year and if so then this is the time to use them.

You are able to redeem points, for instance, and spend these on your holiday purchases at partner retailers. You can also increase the number of rewards you earn by using your card’s online shopping gateway. These stores may offer you discounts, points or even cash back.

You should look at what rewards you are able to get with your credit card and see how you can use these to your benefit over the Christmas period.

Create a Spending Budget

Using a credit card over the holidays doesn’t mean that you can shop without any thought. Credit cards are a lot easier for us to use and we don’t feel as bad when we pay with one when compared to cash, but this means it can lead you to spend more.

You should definitely have a budget in place for the festive season. Create a list of everyone that you plan to buy gifts for and how much you want to spend. Take a look at your monthly income and expenses and see what you can reasonably afford to spend and still be able to pay your credit card off in full once it’s all done.

If this doesn’t match what you have budgeted then you may need to cut back on the amount that you are spending on gifts. Another option might be to transfer the balance to a card with 0% APR, but you need to be sure you will be able to pay the balance off before the promotional rate ends so that you can avoid the interest.

Shop Safe and Watch Your Accounts

Credit card fraud can occur at any time, but it does seem to be more prevalent over the Christmas season when we are swiping our cards more often and shopping online more. If you are concerned about your credit card safety when shopping in-store or online then here are some things you can do.

  1. Always insert your cards security chip into a machine rather swiping the stripe as this offers more protection.
  2. You could link your cards to a reputable mobile payment app and use this to pay for purchases for extra security.
  3. Make sure the websites you use for online shopping are secure and have security measures in place.
  4. If you are on a public Wi-Fi, then avoid using your credit card to make an online purchase.
  5. Practice caution when making credit card purchases from third parties. Verify the seller’s information before you hand over your credit card details.
  6. Create account alerts that notify you of new purchases and check your statements often for any signs of fraud.

Wait…You Need to Know What to Avoid…

Festive Season Credit Card Don’ts

Chase Store Card Discounts

Over the festive season, you may start to feel that you are being offered a new credit card at every store you go into. Retailers may offer large discounts on your initial purchase, store vouchers or other incentives aimed at tempting you to take one of the store cards.

However, even though store cards may offer initial savings, in the long run, these cards won’t prove to be as effective as traditional rewards credit cards, especially if you don’t go to that store often.

Also, a retail store card may charge a higher annual percentage rate for purchases compared to a regular credit card, which means it will cost you more over time if you carry a balance.

Keep in mind that each enquiry for any new credit will reflect on your credit report and adding multiple credit cards over the festive period will take points away from your credit score.

Max Out Your Cards

Your credit score is largely determined by your credit utilisation ratio. This ratio shows how much of your available credit you are using at any time. Having a high balance will then have a negative impact on your credit score.

If you have multiple credit cards, then avoid maxing all of these out over the holidays by just using one card for shopping.

This should be the card that offers the highest rewards on purchases or the card that has the lowest APR for purchases.

Stick to one card and watch your balance to ensure that you are staying in budget. You can set up a text or email alert that notifies you of every purchase made or when your balance reaches a certain level.

The holiday season is here and we are all tempted to shop, shop and shop, especially with so many retailers offering specials and discounts during the season, but don’t get silly with your credit cards because once the festivities are over you will just be saddled with debt.