MONEY
M VES 10 Questions You Should Be Asking Your Financial Advisor
How Money Savvy Are You? 1 Winner 10 Questions R250 Cash Prize
Pay what you can afford
5 Reasons Why Getting Paid into Savings Account Makes Cents 10 Symptoms of Financial Stress and How to Deal with it
Debt Review Clearance Certificate Explained
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Contents 3/
Letter from the Editor
5/
Debt Review Clearance Certificate Explained
Be a winner. Answer our question and you could win R250 Cash.
All your questions answered.
9/
How Money Savvy are You?
11 /
10 Questions You Should Be Asking Your Financial Advisor
Test yourself and send us your answers. One winner will be chosen.
These are must-ask questions to have the best financial outcome.
15 /
10 Signs of Financial Stress and How to deal with it
Financial stress is life-threatening. These methods will help you find solutions.
19 / “The day I received my clearance certificate. I knew I was debt-free. I made it. Thank you Debt Rescue for helping me to achieve my financial goals!”
5 Reasons Why Getting Paid into Savings Account Makes Cents Savings accounts can help you grow your money, even while you sleep.
“If you take control of your finances today, you will not be a victim of them tomorrow”
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FROM THE EDITOR It’s getting tough in South Africa. The cost of living has reached a stage which is a tipping point for many people. Debt review is designed to be a protective safety net for over-indebted consumers. Your debt to income ratio does not have to be in the danger zone for you to seek help. If you need the assistance, it is available. October was national mental health month. The statistics are troubling. Poverty, unemployment, homelessness and an out-of-control financial rollercoaster hurts the mental state of many people in our beautiful country. It is very important for you to reach out if you are in financial trouble. On page 18 we provide more information and guidance around what to do if you find yourself in a difficult situation. Every problem has a solution. Write that down somewhere. Save it on your phone. There is always help. On page 5 we explain the legal aspects of the Debt Review clearance certificate. Empower yourself with knowledge. Use the help available. Be serious about your finances and your money will serve you. On a happy note, this month you have two ways to win with one email. First answer our question this month: How has the cost of living changed your thinking? Second: Answer the questions in our money quiz on page 9. Put that in one email, press send and cross your fingers. Winners will be announced in the next Money Moves Issue.
Good Luck!
“Debt review protected me until I could stand on my own feet. Now I run my own business. It’s about realising what needs to be done to get where you want to be”
Debt Review Clearance Certificate Explained
“More than half of credit-active consumers in South Africa are over-indebted.” ~ NCR
Debt Review Clearance Certificate Explained According to the National Credit Regulator “More than half of credit-active consumers in South Africa are over-indebted.” It is for this reason that debt review was instituted to protect, assist and rehabilitate over-indebted consumers. Under the National Credit Act, debt review is a legal process which assists hundreds of thousands of consumers each year. The debt review process assists the consumer in managing debt affordably. The process has several benefits: • Assists the consumer to pay their debt off in an affordable manner. • Creditors are no longer allowed to contact the consumer. • The debt review process has no limits on how many accounts can be added. • The consumer’s assets, i.e., house, car, goods are protected. • There is only one monthly payment to be made. Under What Circumstances is a Debt Review Clearance Certificate Issued According to section 71 of the National Credit Act 34 of 2005 as amended (“The Act”), once you have completed your debt review process you will be issued what is known as a clearance certificate. There are many legal factors which influence the ability to receive a clearance certificate. These factors are as follows:
A clearance certificate may only be issued when all short-term debt under debt review is settled in full. The only exception is a bond on your home. Your bond must however be paid up to date and have no arrears on the account for it to be eligible. One important factor to take note of is that if you lapse in your debt review payments, it may be very possible that you will also fall behind on your bond. Once your debt counsellor is in possession of all the paid up letters for the accounts that were under debt review, the debt counsellor will issue the clearance certificate and inform the creditors and credit bureaus.
Life After Receiving Your Debt Review Clearance Certificate Whilst you pay off your debt, you may not obtain more credit. Once you receive your clearance certificate, and the various credit bureaus have updated your credit record, you are eligible to apply for credit freely.
Many consumers run head on into purchasing massive items with large repayment terms and simply find themselves in a whirlpool of debt again. We strongly advise that you start small. Build up your credit record and become financially savvy by being clued up through financial education channels, money-wise platforms, and plan every cent that you spend.
This oak did it. You can too.
How Money Savvy Are You?
10 Questions 1 Winner R250 Cash Prize Send your answers to editor@debtrescue.co.za
11 2 33
Question: What year was the Reserve Bank established?
2
Question: In your own words explain what inflation is.
A: 1938 B: 1921
Question: True or False: Debt Rescue has a YouTube channel called Money Moves with Debt Rescue?
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Question: In your own words explain what it means to be over-indebted.
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Question: Yes or No. Is it important to check your payslip every month?
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6 77 8
Question: If you wanted to finance a new car, which option would be more financially more rewarding? Choose A or B.
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A: Personal loan so that you have extra money.
Question: Explain in your own words what unsecured debt is.
Question: If you cannot afford your debt what should you do? Choose A or B A: Run from your creditors. B. Call Debt Rescue to find an affordable solution.
B. Vehicle finance.
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Question: Choose one answer: which one will get you to become financially free faster Partying or keeping a budget?
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Question: Choose A or B - What is the best way to manage your finances? A: Speak to a close friend to advise and help you spend your money B. Open a savings account and use a budget every month.
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Questions You Should Be Asking Your Financial Advisor
“The more you make your money work for you, the less you have to work for your money.” ~ Idowu Koyenikan
A financial advisor is there to assist you in making informed decisions about your finances to achieve goals which provide monetary growth.
Your financial advisor will have limitations, these limitations in their abilities and financial background must be made known to you.
They should be providing you with a realistic financial plan tailored to meet the needs of your specific portfolio. Making the right money moves all the time can seem a little daunting when your financial portfolio expands.
Question 2 – What experience do you have when working with a financial portfolio such as mine?
There are many options on the market as to where to place your money. It is wise to seek out a professional who has in depth financial knowledge to ensure that you make the right financial decisions. Financial advisors may work independently, or they may be employed by a financial institution. Regardless of how they operate, the relationship that you have with them must be built on utmost trust. Let us look at the 10 vital questions which you must ask your financial advisor, yet you must also be comfortable with the answers that you receive from them - this is how the trust factor works. Question 1 – What are your limitations regarding your expertise? One of the biggest red flags in any meeting with your financial advisor is when they promise to be an “expert in everything.” They could even avoid the question with a simple, “I have not covered that before, but I am sure we can sort something out.”
Every financial portfolio is different. Depending on the number of risks you are willing to take for monetary growth - you will have a high risk, balanced or low risk portfolio. Some financial advisors thrive on working with high-risk portfolios. If they have no experience working with a balanced or low risk portfolio, then this may not be the financial advisor for you. Question 3 – Do you have any clients, current or previous, who I may speak to? A contactable reference is imperative. A good financial advisor will have a vast list of happy clients. It is also important that you do in fact contact these clients and hear what they have to say as well. Question 4 – How many clients do you have at present? “Too many” and “too few” are unsafe answers. It is important that the number of clients are manageable for your financial advisor as well as having a good track record.
Question 5 – Are you a full-time financial advisor?
Question 9 – Can you explain that in more detail for me please?
No one wants a financial advisor with a full-time day job in a completely different career. This needs to be their full-time career.
Career jargon happens across the board - it is no different with financial advisors. It can be easy to get lost or confused by big terms. If you don’t understand something simply ask for a more detailed explanation on the process.
Question 6 – How does your fee structure work? There are different ways in which financial advisors get paid. Some gain commission from a variety of products and others work only through a fee structure. While many institutions advise consumers to veer away from commission and fee based financial advisors, you must decide on the entire package of offerings as well as the expertise provided from your financial advisor. Question 7 – Can you provide me with a list of all the services you offer? It is important to have a full scope of everything that your financial advisor offers - along with pricing, when it changes and by how much. Question 8 – Do I have access to my financials at a moment’s request? Transparent financials are very important. Usually, your financial advisor will provide you with a six-month print out and update. However, these figures should also be available at a moment’s notice.
If your financial advisor refuses to explain, or gets irritated, perhaps it’s time to find another one. Question 10 – What happens if I need to withdraw from any given product? It is easy to receive information about where to place your money however, it should be just as important to understand the fees and time periods involved if you wish to cash in investments or move them around. Financial advisors have a responsibility to look after your money, but with this responsibility you need terms and conditions. It is beneficial to have a trustworthy person who is looking out for your financial wellbeing, however you need to ask the right questions and ensure that you do not become too comfortable and create the risk of losing everything. Choose your financial advisor wisely.
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Signs of Financial Stress &
How to deal with it
Stress has become a norm. A word which casually passes our lips while we race in between traffic, complete day-to-day tasks, as well as manage family, friends and co-workers. We are not always aware that the financial stressors in the country, as well as our own lives, have lasting effects on our mental health.
An Overview of Stress and its Implications in Your Life Finances in South Africa cause particular stress among the population. From rising interest rates to bouts of loadshedding during dinner time, our stress levels are causing reactions to small insignificant incidences. Stress disrupts the natural flow because it signals the fight or flight response in the body. This causes cortisol to be released into the system and disrupts the natural state of the body. Long-term activation of Cortisol as well as other lesser-known stress hormones can cause life-long damage if not treated. The 10 Symptoms of Financial Stress If you or anyone you know suffers from three or more of these symptoms, it is important to seek out professional help. Financial assistance can drastically reduce the amount of stress in life, and psychological assistance can prevent these stress symptoms from causing lifelong damage. 1.) Insomnia When we sleep, we heal. Our cells are repaired. And our immune system is strengthened. Lack of sleep can cause several problems. Thoughts about how to make ends meet, where to get money that you need or pay the bills that you have, or even how to feed your family may keep you up at night. You should consider speaking to someone professional to find a
solution. Lack of sleep over time can cause serious damage in a person’s life including potentially falling sick often. 2.) Frequent Migraines Migraines caused by stress are known by a variety of names i.e., tension headaches or stress headaches. The symptoms can be sensitivity to light, pain in the face, neck and/or muscles. Other symptoms may also include sensitivity to loud sounds. And difficulty falling asleep. Headaches and migraines hinder the ability to be productive at work. Frequent suffering may lead to other problems such as taking off sick from work. 3. ) Your Income is Not Covering Your Expenses When your income no longer covers your expenses and debt repayments, it means that you are over-indebted. This can be easily remedied through the legal process of debt review. If you free up money in your budget, lower those debt repayments and only need to worry about a single affordable payment, your stress levels will be decreased. Stress can be life threatening. This is why Debt Rescue takes charge of lowering financial stress through providing debt review. There is always help, you simply have to ask. 4.) Arguing with Everyone Around You More Often High stress levels are indicative of irritability and mood swings. Are you fighting with everyone around you about small things, or with your
family about money problems? It may be that your stress levels are through the roof. Finding help to organise and remedy any financial troubles you may have - will help you. 5.) Unable to Provide for Your Family or Yourself The entire world is feeling unimaginable financial stress. The lower income earners, and the over-indebted even more so. When you cannot provide, despondency and loss of interest in moving forward or finding solutions goes out of the window. You need real willpower to call your family together and have an intervention to find adequate solutions. Do not be afraid to ask for help and support. 6.) Lowered Energy – Feeling Sluggish Low energy can be due to multiple reasons; however, stress will cause prolonged energy loss. If you are experiencing a complete lack of energy and perhaps even weight changes, it is time to go and see a professional about your stress levels and try to sort your financial stress out as well. 7.) Inability to Perform Day-to-Day Tasks as Before This symptom goes hand in hand with withdrawal from normal life. If you are having trouble communicating or performing tasks with the efficiency that you had previously, something is wrong. Your stress levels could be dangerously high, and this needs to be attended to immediately.
Do not leave these problems until it is too late. 8.) Withdrawal from Normal Life High stress and pressure may cause depression. Symptoms of depression and stress include withdrawal from normal life. Isolation and withdrawal cause suffering for our social selves and daily lives which can lead to a host of other problems. It really helps to have a friend on call who knows to bring you out of feelings of withdrawal and take you for a walk or a coffee or a simple break. It is important to allow yourself to speak, socialise and to be part of society. 9.) Anxiety and Constant Worry Constant worry and anxiety have lasting effects on your health. Even though it is terribly difficult to understand when you are in the problem and not in the solution. There is always a way to change your circumstances. Anxiety must be treated by a medical professional. There are over the counter medications, but it is always wiser to speak and be treated by an understanding, compassionate and reliable medical professional. 10.) Suicidal Thoughts Stress can convince the mind into thinking that there is no solution beyond the current problem and cause depressive symptoms. When someone is under extreme financial pressure suicidal thoughts may become prevalent. If you are experiencing any thoughts of taking your own life, you need
to speak to someone professional immediately. There is always a solution to every problem in life. Below are the contact details of SADAQ. Make the call.
5 Reasons Why Getting Paid into Savings Account Makes Cents One of the easiest accounts to open at a banking institution is a savings account.
5 Reasons Why Getting Paid into Savings Account Makes Cents When it comes down to finances, we all want our money to be kept safe. It would also be great if our money could grow while we focus on day-to-today living. These are just two of the benefits that we will cover in greater detail below. 5 Key Benefits of Using a Savings Account for Your Salary Savings accounts are offered by every financial banking institution across South Africa. Each savings account has unique benefits, however, the five below mentioned benefits ring true across the board. Easy to Open One of the easiest accounts to open at a banking institution is a savings account. All you need to take with you is: • Your identity document • Proof of address • First deposit fee (this amount varies from bank to bank. Some banks do not request this amount up front) In this digital age you are now able to open a savings account with some banks without even visiting a branch. Everything is digitised and created for you.
Accessible A savings account is tailored around transactions. You can withdraw, deposit and save your money in your account as you wish. Many banks do not charge for certain transactions such as free deposits up to a certain amount. Other banks have free ATM withdrawals or free swiping facilities attached to your account. Interest-Based Earning A savings account incurs interest on the money that you leave in the account for a certain period. When the interest rate in the country goes up, so does the interest that you earn on your money in your savings accounts. It is important that you choose an account where your interest rate earned will increase over time as well. Some banks offer as much as a 10% annual return on savings. Your Money is Safe Gone are the days where carrying cash is the norm. The greatest money move that you can do for yourself is have your money in a savings account with a trusted bank. Using your card to perform day-to-day transactions is far safer and wiser. A Goal-Orientated Money Move If you know what your interest rate is, you can work towards achieving your financial goals. Set those financial goals and use the power of the savings account to achieve financial freedom.
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