What is Financial Freedom?
Everyone has a different view of what Financial Freedom means to them. We all have different needs, ambitions, and dreams. What does being Financially Free mean to you? It doesn’t have to revolve around Rands and Cents.
Most people believe you have to earn huge amounts of money to be Financially Free, but this is not true. Financial Freedom starts when the money you are earning is working for you to build a better life for you and those you love. It starts with not having to panic about whether you will have enough every month, and when you can dream and plan for a better future.
How does Debt fit into this picture?
Debt is our biggest stumbling block to Financial Freedom. Debt has been described by many as modern slavery. Interest is charged on the debt you are paying off and is a real expense that eats into your income every month. Getting rid of your debt burden is the first step on the path to Financial Freedom.
For some, this may seem impossible questioning how they would survive without debt. South Africans generally have a culture of buy now pay later. Credit is easy to come by and we feel entitled to have what we want when we want, as a result, this is creating an over-indebted society.
Over-indebted sounds like a scary word. Simply put it means that you have more debt than you can afford.
These are the symptoms that you may be experiencing:
- You find it difficult to make the required monthly payments on your debts – loans, store cards, credit cards etc.
- If you do pay all your debt you don’t have enough money to make it until the end of the month
- You are not able to pay other important bills for example school fees
- Avoiding private number calls
- The stress of not having enough money causes you to have arguments with loved ones or feel depressed
- Taking time off work especially around paydays because of the stress or to avoid debt collections agencies or loan sharks. (Mashonisa)
- You are considering taking another loan to pay off your debt or resigning from your job to get your pension to pay off debt
- Constantly borrowing from family and friends to make ends meet
- You feel like you are living from pay day to pay day to service debt
- Not able to save money or plan for your future
- You feel like you are going backward financially
If you have answered yes to one or more of these questions you are over-indebted.
You don’t have to feel embarrassed! There is NO SHAME in being over-indebted. In fact, most South African’s are! The South African Reserve Bank estimates that over 12 million of our country’s 16 million employed people find themselves in this situation. High-interest rates and the rising cost of living is dramatically affecting ALL South Africans. The price of everything keeps increasing, from petrol to food to electricity and water. Our salaries are NOT increasing at the same pace. This creates a gap and everyone is falling into DEBT.
What remedies are available to me?
The shame of having too much debt and not coping financially makes many people stick their heads in the sand and hope things will miraculously improve. They won’t!