Money Moves with Debt Rescue Digimag September Issue

Money Moves FR

EE

with

Debt Rescue

How Financially Fit Are You? FREE Checklist

September, 2022

No Room for Spending Mistakes with South Africa’s Latest Inflation Rate

How Well Do You Understand Your Payslip?

How to Survive Loadshedding

5 Effective

Saving Strategies for Any Budget

The Ugly Truth about Saving Competitions

Survey Results

Radio Interviews

Pay what you can afford

2 Chances to Win Cash Prizes Inside

Finance Building Videos

Real World Advice

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11

From the Editor

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8

5 Effective Saving Strategies for Any Budget

How Financially Fit are You? Free Checklist

In the Press

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9

How well do you Understand Your Payslip

The Ugly Truth about Saving

8

How to Survive Loadshedding

Contents

14

No room for Spending Mistakes

17

Survey Winner New Survey

Life is a series of constant decisions...

Managing your debt doesn’t have to be.

Choose to pay one affordable monthly payment.

Pay what you can afford WhatsApp one of our consultants today for a Free consultation.

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From the Editor Dear Readers, The last two months have been intense. Inflation has skyrocketed to 7.4%, the prime lending rate has followed with 9.00%, and grocery prices are clamping down on the spending power of many consumers.

Despite the hardships, South Africans always find a way to survive and make life work.

We are truly a resourceful people. Our Winning Reader for this month is proof of this resourcefulness and out-of-the-box thinking. If you have not played shadow puppets with your kids, you should definitely try it! Thank goodness loadshedding has calmed a little.

This month our question to you is: What are you most grateful for in your life? Despite the hardships and financial constraints we are currently facing, what makes your life light up everyday?

Our digimag is packed cover-to-cover this month with savings tips, tricks and hacks. We have financial guidance from our Chief Business Development Officer, Annaline van der Poel as well as our CEO Neil Roets. Make sure to open the digimag in your browser and turn the volume up.

We have four epic YouTube Video’s to level up your financial wisdom as well as a financially fit checklist to download on page 7. We hope you enjoy this edition and don’t forget to enter our Cash Prize Survey (Page 19).

Winning Letter My loadshedding activity is for my wife and I to entertain our daughter with educational play. We point the flash light to the wall and make flash light puppets on the wall, and doing educational teaching with her. It’s a win-win situation...

Financial hardship is the main cause of stress for 73% of people.

Help is Available.

WhatsApp Now

In the Press Warning to South Africans as finances crumble Read Now Annaline van der Poel talks to Kaya FM about the decrease in fuel prices Listen Now Neil Roets talks to Smile FM about the economic damage that has been done!

Listen Now

The Ugly Truth about

SAVING

“Opportunity is missed by most people because it is dressed in overalls and looks like work.” ~ Thomas Edison

35% of middle-class South Africans do not save any money at all, and 61% are saving 10% or less. In a country where 11.9% of those living between the upper and lower bound poverty lines are vulnerable households, these are troubling statistics. - BusinessTech Not saving money at all is the road to financial self-destruction. Saving money provides personal power, self-reliance and peace of mind. The more you save, the less you fear. The more you save, the less you spend. The more you save, the greater your chance is of achieving the livelihood of your dreams.

So what’s the ugly truth? A lot of us cannot afford to save…

By the age of 35, statistically, you should have saved at least half of your annual salary towards retirement. This does not count in the amount of money that you should be saving for emergencies and specific goals in your life such as a deposit toward a home loan.

Perhaps, up until now, life has been a day-to-day survival strategy. Perhaps you have raked up a substantial amount of debt. Perhaps someone told you that saving is not important, or you never had good enough role models. Regardless of the reason why your savings are not where they should be, there is always time to start – now.

How does Debt Affect my Savings?

Debt repayments should not affect your savings. If you are budgeting correctly, you will be saving and repaying your debt each month without a problem. Unfortunately, inflation, interest rates, fuel prices and electricity increases have all tipped the budget to weigh heavily on expenses.

The rule of thumb is, 50% towards essential living expenses (rent, utilities, food, transport), 30% towards (dining out, subscriptions, clothing) and 20% towards your savings.

But not many of us can stick to that rule of thumb…

In theory, debt would fall into an essential living expense. Many allocate the 20% they should be saving to debt instead. The majority of people who need financial assistance such as debt review, spend an average of 60% of their total income to service their debt.

How much are you spending on debt versus your income?

Download your credit report here to see where you are standing.

Do You Know Where the Needle points on your Credit Score?

583 - 613

7 52

61 4-

82 -5

68 0

Average

487 -

6 76

52 6

Favourable

168

Below Average

Good

Poor

Excellent

999 767 -

0 - 486

Unfavourable

Knowledge is Power

Get Your FREE Credit Report Now! Click Here!

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How Savings Accounts Affect My Credit Score

Many aspects affect your credit score, your savings account is not one of them. Your savings account will however help you in accessing credit.

61 4-

2 58

68 0

Average 52 6

Below Average

Favourable

Unfavourable Poor

Good Excellent

999 767 -

The general rule of thumb is that the longer you leave your money in the savings account, the more you will earn. The more money that you have in the savings account the higher the interest rate can be.

Do your homework and ask your financial institution for details about your savings account and make an informed decision about which savings account will work the best for you.

Debt review can be a brilliant solution to those who are feeling the blow of rising costs whilst managing their debt. Choosing an expert debt counselor such as Debt Rescue when you’re struggling to keep up with your monthly repayments, saves your credit score as well as

583 - 613

752

6 76

Other banks may use time as an indicator for interest rate increase. For example, if you leave your R2,000 in your account for one month you will receive 0.1% interest. However, after 6 months your interest rate will increase to 10% and so forth.

Defaulting on debt is disastrous and will prevent you from accessing credit, being granted a home loan or any sort of personal credit from accredited financial institutions.

168

On a R2,000 deposit you may earn 3.5% per month. This interest rate, which is money that the bank pays you to leave your money in your account, will then increase to 4% per annum after you have R10,000 in your account.

487 -

For example:

The most damaging financial aspect to your credit score is defaulting on debt repayments. It can take a score that is above 700 and bring it crashing down into the red zone in a matter of three months.

Mending Your Finances Begins with Knowing Where You Stand Now

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Savings accounts differ from one financial institution to the next, so you need to do your homework before choosing one. Many banks offer different interest rate structures.

The more you can show that you are financially stable, the higher the likelihood of credit being granted to you is. Your free credit score can be downloaded here.

Your FREE Credit Report is the Starting Block!

Click Here

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How to Get The Best Savings Rate

The general rule of thumb is that the longer you leave your money in the savings account the more you will earn.

How to

Survive

Loadshedding

How Financially Fit

Are You?

Download Your FREE Checklist Here

How Well Do You Understand Your

Payslip?

“What is Salary? Something which comes like tortoise and goes like rabbit.”

The payslip is an extremely important part of your working life. That piece of paper proves you have an income. But it also allows you to fully understand your deductions. It’s used when applying for credit, renting a property and applying for a job.

One of the first steps on your financial journey includes understanding your payslip and how tax affects your monthly expenses.

Let’s break down the finer details of the payslip. Each company is different, but all have certain legislated deductions such as PAYE Tax and UIF. If you are not sure what these acronyms are, don’t fret we will unpack these, and other common factors found on your payslip. Of course, if there is an element which we have not covered, feel free to leave a comment below and we will assist where possible.

Gross Salary, Nett Pay and Cost to Company A common confusion arises when we need to differentiate between gross and nett. Gross salary is the amount of money before all the deductions happen.

Nett Pay is the amount which appears in your bank account.

The easiest way to remember it, is that gross means large, not disgusting, as used in teenager slang.

It is the larger amount of money. Once that larger amount has been caught in the ‘net of all the deductions’ you have, your nett pay is the amount which you take home.

Cost to company on the other hand, is the overall cost that the company pays to have you work for them. This means every contribution including their share of tax and benefits which you have, makes up this amount.

Skills Development Levy (SDL) The Skills Development Levy is only applicable with companies who qualify and register. The SDL works out to 1% of your salary and will appear on your payslip every month. You do not pay this amount, your company does.

The SDL is there to promote an entire host of uplifting actions within the workforce.

The Necessary Information Every payslip must under law contain certain information.

These details make the payslip legal.

They include: Your name, identity number, tax number, the date on which you were appointed, your address and your employee number if you have one. You should also see the company’s name and address.

PAYE Tax ‘Pay as you earn’ tax is the income tax which you pay.

This is your contribution to the country. Depending on your gross salary, you fall into a specific tax bracket. You should always check that the correct amount of tax is being taken off your salary. You can do this by visiting the SARS website here. Each month your employer will deduct PAYE Tax and will pay SARS on your behalf.

Unemployment Insurance Fund (UIF) All employees are liable to pay UIF. The Unemployment Insurance Fund is designed to provide short-term relief to workers when they are

The fund also assists the dependents of a deceased contributor to the fund. UIF now has an online platform in South Africa.

Deductions There are many different types of deductions which could show on your payslip. These can include medical aid contributions, court ordered deductions etc. It is important to know that your employer is obligated to ask your permission before making deductions, except for court ordered deductions.

Fringe Benefits Fringe benefits will appear on your payslip. These are extra added benefits from your employer over and above your salary such as a medical aid, car allowance, petrol allowance etc.

Medical Aid Tax Credit (MTC) If your company supplies medical aid they will usually pay a portion of your medical aid and you may pay per extra member.

You may notice a medical aid tax credit applied in this case.

You can read further on medical credits here.

While the payslip varies from employee to employee, it is a great tool for you to understand. It also shows you whether your gross salary is market related. It allows you to understand where your money is going.

It is important to make time each month to go over your payslip and double check that everything is correct. If your nett pay is not covering your debt repayments, reach out to Debt Rescue and see how we can assist you in lessening the stress and feeling more of your nett pay in your budget.

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unable to work. You can claim this fund in the event that you become unemployed under specific circumstances, or if your company doesn’t pay maternity or parental leave, illness or adoption.

It is important to know that your employer is obligated to ask your permission before making deductions.

5

Effective Saving Strategies

for Any Budget “Develop success from failures. Discouragement and failure are two of the surest stepping stones to success.” ~ Dale Carnegie Low-income households in South Africa make up at least 54% of the population. More than half of South Africans fall into the low-income households with the main breadwinner earning in excess of R10 000 per month. With the current state of the economy, no one expects low-income families to be able to save money.

However, they would be wrong.

Regardless of how bad your financial situation is, there is a solution. There is always a path to take to make it out of financial slumps.Here are 5 effective saving strategies for any budget.

Financial Knowledge is King of the Coin Many financial terms are often a mouthful. Two common reactions are to ignore the entire subject.

Or they simply agree to what the ‘more financially capable person’ is saying.

This creates a massive dilemma of entering into agreements which you do not understand and cannot fulfill.

Not understanding financial terms does not mean that you are stupid. Financial jargon, like any other area of life, is like a language which needs to be learned and understood. The quicker you learn the terms, understand what they mean and the implications they have, the better you will understand how to work with your own finances.

For example, do you understand what inflation is?

Do you completely comprehend the details and the effect that it has on your finances? If not, here is a video to explain everything about inflation. Of course, inflation and interest rates go hand in hand. To understand more about interest rates and how you can save money when they rise, click here.

Learn everything that you can to increase your knowledge to implement what you learn you will increase your financial knowledge.

Changing Financial Habits is Like Dieting Everyone has failed going on a diet at one time or another. Why? Because most diets require you to instantly cut off almost everything that you are used to eating. When you do this, you send your body and mind into shock.

Your cravings for the old habits become stronger and stronger.

Unless you have an iron willpower, you are bound to fail.

Changing your financial habits is a must. If you are in a position where finances are troubling, then your money habits are not working. Change is the secret in the sauce.

Do not cut off old financial habits and go cold turkey. This

will only send you into a state of shock and you will return to these habits. Instead, make small changes.

Changes which you can handle. Teach yourself to become used to saving money, buying better and working with your money on a smaller scale.

A habit takes approximately a year to form, but any activity becomes automatic after only 66 days.

One Luxury Turned into Savings We all have luxuries which are purchased on or after payday.

Even that chocolate bar can be seen as a good enough luxury.

Instead of buying the item, put the money away into a savings account.

The average chocolate bar costs just under R20 now. By getting into the habit of saving this money and seeing it grow over time by simply reducing your luxuries.

Lowering Your Costs When you have a smaller budget with no money left over to save, you need to make that money. The easiest method to accomplish this is to lower your costs. Lowering your costs can mean anything from: • • • • • •

Choosing cheaper brands of food Changing the food you eat and the meals you prepare Walking more and driving less Replace phone time with activities like reading to save on data costs Keep social outings to a minimum Begin by paying off accounts and closing them

Every cent that you spare by lowering your costs, place into your savings account.

Before Anything Else, Save First The greatest tip is to save before you do anything in the month. Work out through your budget how much you can save and then pay yourself first.

Take that money and place it into your savings account before other unknown expenses crop up.

It may sound like saving money is boring and tough. Especially for those with a smaller budget who must cut down on costs as much as possible to make money for saving. But once you see your investment grow, it will feel worth the effort.

It is known that there is always a storm before the most beautiful clear skies. If you can save money and live frugally for a while until your finances are in order, you will find yourself with a bright financial future.

14 Years Helping South Africans

No Room for

Spending Mistakes with South Africa’s Latest Inflation Rate!

“Money isn’t everything, but everything needs money.”

South Africa is currently experiencing exorbitant inflation levels. While we cannot change this, we can become wiser with our money. To learn more about inflation, what it is and what it means for you, visit our Money Moves with Debt Rescue YouTube Channel here.

With an increase in inflation, consumers naturally have less spending power. With a decline in spending power, it becomes much more difficult to navigate day to day costs.

Those who can keep their heads above water without needing assistance, will have to put spending blinkers on.

Every cent needs to be turned over ten times before letting it go. Luxuries need to be cut in half. Impulsive shopping habits must come to an immediate end. There is absolutely no room for spending mistakes now.

What is Inflation and Why Should You Care?

In layman’s terms, inflation is designed to reduce the purchasing power of consumers. This is due to the increase in goods and services of the country’s economy.

When inflation is high, we tend to spend less. In theory, this will help bring the cost of products and goods down.

Inflation is curbed through increasing the interest rate, however, if over indebted, brings about a whole new set of problems for the consumer.

Watch our video on interest rates here.

Less purchasing power means that we can no longer buy last month’s food for the same price anymore. The Household Food Basket calculated by Pietermaritzburg Economic Justice and Dignity (PMBEJD) is currently sitting at R4688,81 as of June 2022.

The household food basket increased by R72,89 (1.7%) in one month.

The Major Price Increases The household food basket may have increased by 1.7%, but some staple and well-loved food items have increased by 5% and above.

These are: • Cooking Oil has seen a 13% increase. 5L of cooking oil now costs R228,94.

• Curry Powder has increased by 5% since May. • Green peppers are now 10% more expensive than last month.

• Apricot jam, Cremora and brown bread has seen a 5% increase.

Those food items with an increase below 5% are: • Cabbage seeing a 3% increase.

• Margarine is now 4% more expensive than in May. • Salt and white bread both increased by 4%.

• Maize meal which is bought by many low-income households is now R268,88 for a 30kg bag.

• Even chicken feet are 3% more expensive.

Possible Solutions for Struggling Consumers Turn your cents over a thousand-fold. Some households will not be able to do this and will have to re-adjust their budget. If you do not have a budget by now, it is imperative that you make one. Do not deviate from it and plan everything down to every loaf of bread that you buy.

Do not buy food on debt. Do not take out a payday loan or a loan which allows you to have access to your salary throughout the month. This will only drive you further into extreme financial trouble.

Many consumers are finding the cost of debt and living expenses difficult to manage. WhatsApp one of our consultants to discuss your options for financial assistance.

At the 7th South African Customs Union Meeting, President Cyril Ramaphosa mentioned that something needs to be done about the rising costs and perhaps allowing various economies to work together to become food secure and self-reliant. For now, we need to manage the best way that we can. Do your homework before spending your money and ensure that you keep your head above water and use the help that is available.

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With a decrease in spending power it naturally becomes more difficult to navigate day-to-day costs.

In the Red? Keeping Your Credit Score higher than the Average mark is important to Reach Financial Freedom

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