The power of a monthly budget, and the financial benefits of taking the time before your next pay date is to assess your personal budget for the financial month ahead. Affordability and costing on your disposable income is the key to surviving the downgrading of our economy that will spill over, effecting all consumers over the next few months in a negative way.
At CDS we find that a large percentage of consumers do not stick to a monthly budget for various reasons. We came to understand the largest percentage of middle income consumers that they do not understand how to budget. Asking these consumers why they do not budget, their answer were simple they were never showed how to do a budget, no one took the time to show them what a budget means.
In this week’s blog we want to focus on your personalized budget and how we can help you create financial freedom by showing you how easy it is to adapt and adjust to a new monthly routine taking and making time for your budget in the various income categories, ie: individual income, joint income, married out of community of property with joint commitment to your spouse’s expenses and additional income received, household expenditure, financial obligations towards assurance, insurance etc., and debt obligations that must be met every month.
We also found a large percentage of home loan owners was paying monthly bonds and did not know how to calculate the interest on their home loans. This is where we can share valuable information to help you maintain a healthy debt profile and ensure affordability before you sign for your new home loan. It is so important that you can afford the monthly interest should you fall into arrears and must apply for a debt review application. This information will help you to understand how Consumer Debt Support (CDS) can help you restructure your debt repayment that will ensure we cover the interest of your home loan in the new payment plan. If the interest is not covered, the debt counsellor will find it difficult to negotiate a reasonable, affordable payment plan on your bond and obtain a consent order that will ensure peace of mind when you can no longer afford the contractual agreement of the bond.
Furthermore CDS found consumers that bought a new vehicle did not have the knowledge to understand how to do a budget and affordability understanding of their financial planning to do the calculations before speaking to a dealer where they bought a used or new vehicle. Consumers left the budgeting to the dealer with the information of expenses leaving out other essential expenses that was not thought of when doing the application for credit at the time. This leaves the consumers vulnerable of the banks coming with their collection agents to take Voluntary Surrender possession of the consumers vehicle, which then excluded this vehicle from a debt review application.
The bottom line is that countless vehicle owners is left in a panic not being able to afford the second and third payment of their new vehicle because the full impact of the budget was not taken into consideration before buying the vehicle or new home.
Consumers applying for personal loans or in-store cards credit agreements we at CDS see the same problem: the lack of budgeting when doing the calculating of affordability of that new loan. Receiving the quotation from the creditor declaring the monthly repayment, total amount calculated interest, total amount service fees on the full contractual term until the debt is fully paid back, should enable you already to do your personal affordability budget. In our findings it is a real fact that these consumers just accept the quotation because they’re desperate for that loan to pay out into their bank accounts, they do not understand the impact of the new loan added to an already most likely over-indebted budget that will send shock waves to their wallets when the first payment is due, which boils down to not being able to afford another personal loan, credit card payment or in-store card payment over and above your other credit agreements that must be paid and household expenses your forgot to calculate in a moment of being desperate.
Consumer Debt Support understand the financial pressure consumers are facing, now with double junk status will most likely be more on the increase that consumers cancel their medical aids, vehicle insurance. CDS can help consumers who are already so vulnerable and desperate to make the right decisions before much damage is done. Cancelling your medical aid can have serious consequences when for example you are on chronic medication or suffer from depression, in other cases you maybe need a good hospital plan for the family that is more affordable. CDS ensure that we have professional practitioners in the industry where we can refer you to them so that they can you the get help with these service agreements and go to a lower premium plan on your medical aid etc, only a registered insurance practitioner can assist you with. Protecting your family always takes priority.
Our objective in today’s blog is to show you how easy it is to do your budget to help you keep record of your debt exposure on a monthly basis. Outstanding capital debt balances owing to your creditors is very important to stay in control of your financial profile when your creditors should be sending you the correct outstanding balance on outstanding credit agreements. This budget you can do on Excel, and every month just change the totals where applicable, do your budget as per your available disposable income. Hope this guide will help you to partake monthly investing in your personal financial well-being and taking control back of your take home pay.
Budget:
Other Income
YOU SPOUSE
Income You Income Spouse
Bonusses Bonusses
House allowance House allowance
Interest receive Interest received
Maintenance Maintenance
Overtime Overtime
Personal gifts Personal gifts
Rent received Rent received
Second job second job
Subsidies and grants Subsidies and grants
Total Income: _____________________
Deductions – salary deduction
PAYE PAYE
UIF UIF
MEDICAL AID MEDICAL AID
PENSION PENSION
Other salary deduction
Loans Loans
Union Subscription Union Subscription
Insurance Insurance
Group life Group life
Funeral Funeral
Tax (SITE & PAYE) Tax (SITE & PAYE)
Garnishee / Admin order Garnishee / Admin order
Other Other
Total deductions: ___________________________
Nett Pay: _______________________________ (take home pay)
House hold commitments:
Financial commitments:
Medical Medical
Rates and Taxes Rates and taxes
Rent Rent
School fees School fees
Telephone Telephone
Toiletries Toiletries
Transport Transport
TV license TV license
Water & Electricity Water & Electricity
Entertainment Entertainment
Security Security
Family expenses Family expenses
Pool chemicals Pool chemicals
Body corporate levies Body corporate levies
Other Other
Total: ____________________
Household Expenses
Assurance Assurance
Credit insurance Credit insurance
Credit life insurance Credit life insurance
Pension & Risk Benefits Pension & Risk Benefits
Bank charges Bank charges
Bread and milk Bread and milk
Cellphone Cellphone
Clothing Clothing
Contingencies Contingencies
Domestic worker Domestic worker
Groceries and cleaning Groceries and cleaning
Insurance Insurance
Meat Meat
Land line phone Land line phone
Internet Internet
Sports Sports
Gambling Gambling
Cigarettes and liquor Cigarettes and liquor
Petrol Petrol
Children pocket money Children pocket money
Child stationary pm for year Child stationary pm for year
Parking at work etc parking at word etc
Car Maintenance Car maintenance
Home entertainment Home entertainment
Univercity / tech fees Univercity / tech fees
Creche Creche
Boarding fees Boarding fees
After care After care
Alimony / maintenance Alimony / maintenance
Dry cleaners Dry cleaners
Chemist Chemist
Church Church
Social club Social club
Provision for savings Provision for savings
Doctors bills Doctors bills
Total commitments: _________________________________
