Bayport Blog

‘tis the season to consolidate your debt

December holidays and Christmas festivities can be very tough on your pocket. How to make this year different? Plan, plan, and plan some more so you don’t get yourself into more debt than you can manage.

In a few weeks’ time, many South Africans will start going on their December holidays. Whether it’s the beach or the mountains or going home to be with family, most of us have plans. But do we have the money to turn all those plans into reality?

That is a question best answered in advance. Here are a few steps you can follow to find out where you stand financially, and some suggestions on how to get yourself into better festive season financial shape.

What is your money situation?

• Start with your “have to” list for December. Eg, you have to pay rent, buy groceries, pay loan instalments, have your car serviced or pay bus or taxi fare. It is also a good idea to start buying school supplies and pay school fees upfront.
• What is your “want to” list for December? Eg, go home for a family visit, buy gifts, take your children on outings, buy new clothes.
• Draw up a budget, starting with your “have to” list. If there is money left over, allocate it to your “want to” list.
• Look at all your expenses and see what you can reduce to make more money available for your “want to” list. Eg, stop buying snacks and takeaways every day, plan your trips better so you don’t spend unnecessarily on petrol or transport, think twice before you buy another pair of shoes or a new shirt, use electricity sparingly to keep your utilities bill low.
• Track your expenses and save where you can to build up a festive season fund.
• Don’t forget about January! You don’t want to come back from holiday having spent your entire December salary, and having very little left to get through January. You have to plan ahead.

How can you improve your money situation?

• Consolidate your debts. If you have several different loans and you are struggling to keep up with your repayments (or have defaulted on some already), debt consolidation could be the best debt solution for you. Here’s how to go about it:
  • Approach a credit provider, such as Bayport, and ask for a consolidation loan. The agent will look at your full debt picture, and explain your options.
  • Contact all your current credit providers and negotiate settlement discounts with them. This means that, in exchange for getting their money back immediately, they give you a discount on the outstanding amount. You can do these negotiations yourself, or the company that is willing to give you a consolidation loan can do it on your behalf.
  • Based on the discounted amounts, your credit provider offers you one loan that is big enough to settle all your other debts so that you are left with only a single loan to manage and pay.
  • Make sure you understand the loan offer clearly before you accept and sign it.

With your consolidation loan, your monthly cash flow situation should improve immediately and, if you keep up your payments, it is a sure-fire way for getting out of debt and building a positive credit record.

• Start building a holiday fund today. Keep track of everything you spend so that you can eliminate unnecessary expenses. For example, rather than buying a soft drink or snacks from the cafeteria, bring lunch from home. The money you would have spent can go into your holiday fund. As you build your holiday fund, more of the things on your “want to” list will become possible.
• Forget about the Joneses (or the Khumalos or the Pillay’s!). Trying to keep up with the neighbours or your friends is the worst possible thing you can do for your own financial wellness. This is why you should have your own “have to” and “want to” lists for the upcoming holidays. When you know what is important to you and your family, it is easier to stick to your planning and budget, and stay out of financial trouble.

We all deserve a good break after the year we’ve had, but is very important to not forget about your financial obligations – and the fact that January comes after December. All it takes is good planning and taking proactive action, such as consolidating your debts.

Bayport Debt Consolidation