“Those overly optimistic messages about ‘investments’, ‘more savings towards funds’ and ‘tucking extra money away’ that are flooding your inbox, phone(s) and other communication mediums are beyond ridiculous given the current circumstances.
Adding any money towards savings is an impossible task and an unreasonable expectation. I would rather focus some energy towards managing your debt, because once you clear your debts and work on your debt management instead, you can save money faster and reach your future financial saving goals effectively,” highlights DebtSafe’s debt adviser, Carla Oberholzer.
Whether you had savings before the pandemic or not, dealing with any financial emergency or crisis is extremely challenging and beyond exhausting. It is, therefore, crucial in times of hardship that you proactively try and manage any debt that you have first BEFORE worrying or tackling your goal towards growing your savings.
Since July is a reminder of National Savings Month, saving is, of course, a fundamental financial goal to have. But, times have not been kind. And, it is, therefore, imperative that you set forth what is possible instead. First things first – focus on managing your debt. It will enable you to fix your debt and lead the way to accomplish your saving goal(s).
You may ask: “How and where to start?” Familiarise yourself with two essential aspects:
- Firstly, embrace the advantages of implementing an effective Debt Management plan when it comes to your finances.
A proactive Debt Management approach will allow you to:
- Free yourself from being over-indebted.
- Be empowered to stop your debt from spinning out of control.
- Offer yourself some ‘moveable space’ to negotiate with your creditors when your financial situation may take an unexpected turn.
- Have the capacity to deal with your finances hands-on.
- Gain control over your finances and financial situation.
- Grant yourself an opportunity to stay on track to reach those critical financial goals. In other words, working on your savings (as one of your goals) and your various future saving ideals that you may have.
- Secondly, know what Debt Management involves.
Debt Management is:
- Having an overview of your entire financial situation.
- Determining your debt-to-ratio income.
- Ranking your debt accounts (according to what has lasting value and increases your wealth).
- Setting up a budget according to your needs.
- And, how to use your budget to meet your future financial goals (such as saving).
Get acquainted with, and add the above tips to your financial plan, so that you can move from a position where you feel overwhelmed to becoming pro-active with your finances. You are only truly able to reach a vital financial/savings goal (whether saving for an emergency fund or further studies) when you start recurrently managing and clearing your debt. Remember step by step, bit by bit, slowly but surely and day by day – you can do it, and you will get there.
**If you have, however, tried executing a Debt Management plan and you still require professional help to fix your debt situation, make sure you get the assistance that you need. Go to a trusted, authorised expert such as your banker, financial planner, or in a severe debt case, a registered Debt Counsellor. And, change your situation from being over-indebted to experiencing financial freedom and having the opportunity to save money.