Page 18 - IFV_Issue 5_May_2022

Lifestyle

HOW TO

MANAGE

YOUR

DEBTS

Rising costs are

adding to the
pressure that SA
consumers are
facing in trying to
remain debt-free

ising interest rates and borrowing to make up the shortfall. and services and increase upward
an uptick in inflation are “Increasing inflation will exacerbate inflationary pressure.
Rsqueezing South African the pressures consumers are under, as “Over the past six years, the trend has
consumers between the proverbial the cost of debt is rising and take-home been that loan sizes have increased,
rock and a hard place, as the cost of pay does not stretch as much as it used while the number of credit agreements
servicing debts goes up while the to. For consumers who have expensive have declined. This means consumers
purchasing power of their money debt (with high interest rates), debt are borrowing more per agreement and
declines. counselling is a good option to explore,” reaching the point that they no longer
Benay Sager, chairperson of the says Sager. qualify for further credit. In an increasing
National Debt Counsellors’ Association, Official figures for the CPI stood at interest and inflation rate environment,
says consumers’ disposable income has 4,48%, near the upper end of South we expect this to intensify,” says Sager.
decreased by a quarter since 2016 when Africa’s target range, from a low of He says, however, that there is a silver
the cumulative effect of inflation over 3,27% in 2020. However, electricity lining to the situation which is that
the six years is considered. Data from the and fuel are both expected to increase people who are in debt are now starting
National Debt Counsellors’ Association astronomically, and that will have to look for help more readily.
members shows that consumers are a ripple effect across other goods “All our members have indicated that

16 • Issue 5 2022 • The Villager