DEBT COUNCELLING

At Enkrates Financial Solutions, we not only want you to become debt-free, we also want you to remain debt-free! By developing better Debt Management skills, identifying and then changing your spending habits, you can get out of debt, and, more importantly avoid in the future, finding yourself once again burdened by excess debt.

For more information regarding debt counseling please click here.

Here are a few basic principles to keep in mind if you want to become debt free:

  1. Draw up a monthly budget and stick to that budget
  2. Review your budget on a monthly basis.
  3. Never fall behind on the monthly payments of any of your bills. This includes credit cards, store cards, utility bills and any other financial commitments and obligations that you may have.
  4. Be honest with yourself
  5. Only purchase on a “buy now and pay later” option, if you can afford to pay the monthly balance on the outstanding credit at that point. If not, then you cannot afford that purchase and you need to go without until you are in a stronger financial position.
  6. As a general guideline - always have at least three months of your living expenses readily available so that you would be in a position to deal with any unforeseen circumstance that may occur.

Divide your savings as follows:

  • Savings for your child/children’s education (How many kids do you have?)        
  • Savings for weddings (Do you have girls?)
  • Savings to replacement a vehicle. (How long will your current vehicle last?)
  • Savings for retirement. (Where do you currently stand with your retirement planning – pension, retirement annuities, investments, etc?
  • How much do you aim to have saved up for your retirement in order to achieve your desired retirement lifestyle?
  • Savings for other major purchases. If I need a new (fill in the blank) I will have the money to pay cash and I will only pay cash.
  • Savings for holidays and leisure.
  1. Learn to negotiate a better deal on every major purchase that you make. Negotiation is a skill that anyone can learn and master. A little bartering and haggling can put a little more money in your pocket!
  2. Understand the interest rates and charges that apply to any borrowings that you enter into. When you acquire a car on a hire-purchase agreement, a bond to finance your house or when you use your credit cards to finance any medium term purchase/s you make, you must make sure that you know how much extra money that borrowing is costing you in interest charges. Make sure that your budget can handle any increased monthly commitment that you will have to meet, should interest rates rise and your monthly installments increase as a result. This knowledge will enable you to make better, more informed financial decisions.
  3. Try to buy when items are on sale. If you are certain that you will be using the items that are on sale and not simply buying because something is cheap and that you have the funds for such purchases, then stock up and buy them when they are on sale. Avoid paying full prices as much as possible.
  4. Be realistic. Set attainable and achievable goals. If your expenses and spending are more than your income, then you need to reduce all unnecessary spending. However, if this is not possible then you will need to increase your income if you are to stay in debt-free, positive position.
  5. Plot your net worth.
    Just as an company or organisation would carry out an audit to establish its overall performance, so it is also recommended that you should do your own personal audit and net worth calculation to establish your financial position. A simple and straightforward calculation is shown below:

Total Assets - Total Liabilities = Net Worth
Total assets = A total of all your money from your savings or cheque accounts, trust funds, insurance policies and any other assets (after settling any amounts owed on those assets).