11 Don'tjudge each day by the harvest you reap but by

the seeds that you plant.,, - Robert Louis Stevenson

'vV\Qt1Q ono money

AfriSam WEBINAR

SERIES

EXAMPLE OF A HOUSEHOLD BUDGET

FIXED EXPENSESHouse

Rent/bondHouse insurance

Rates and/or leviesDomestic worker

InternetDSTV

SecurityCar

RepaymentsCar insurance

Policies/savingLife insurance

Medical aidRetirement

Funeral coverEmergency savingsLong-term savings

OtherSchool fees

Credit/store card repaymentCellphone contract

Financial commitment to family

MONTHLY YEARLY VARIABLE EXPENSESHouseWater

ElectricityGroceriesTelephoneCellphone

MaintenanceCar

MaintenanceFuelTolls

FamilyMedical billsMedication

Extra muralsEating out

EntertainmentHoliday

Clothing and shoesGifts

MONTHLY YEARLY PERSONALClothing and shoes

HairCosmetics

Health and fitnessBooksCharity

Eating outEntertainment

Credit cardStore cards

Gifts

MONTHLY YEARLY

this is not necessarily an exhaustive list - there may be other expenses you incur. Just make sure you have captured them all.

Groceries

PetrolClothing

Take-aways

Airtime

Movies W

ine

You can’t meet all your bills

1. Make some calls

2. Make a plan

3. Silence isn’t golden

Speak to credit providers:• Check credit insurance policy

• COVID debt payment holiday

• Restructure loan period

• Debt counselling

Speak to insurers:• Premium break/ reduce cover

Pause investment/retirement contribution:• Put on hold

Don’t just let debit orders bounce….

POLL TIME….

Did you take a debt repayment holiday?• Yes• No• Tried but didn’t qualify

Catch up payment holiday…

Option one: After 12 months• Increase by 5% R9650 to R10133

• Pay off within 175 months

• Extra interest cost: R1 930

Option two: After 12 months• Increase repayment by 1% a year

• Pay off within 171 months

• Extra interest cost: R0

• R1 million mortgage with 180 months left

• 3-month holiday @ R9650 = R28 950

• Extra months to repay: 14 months (now 194 months)

• Extra interest cost: R106 000

Poll time….

How do you feel about your current debt levels?• Comfortable, well

managed• Coping but would like

to reduce my debt• I cannot meet my debt

repayments

Debt spreadsheetName Type Balance Payment Interest Fees Credit Insurance End date

Foschini Revolving R3 000 R500 22% R67 R10 No

Credit Card Revolving R15 000 R450 22% R67 R67 No

Bank loan Term loan R50 000 R1 000 16% R67 R200 2025

Car Vehicle finance R300 000 R5 000 12% R67 No 2025

Home loan Mortgage Bond R1 000 000 R10 000 7% R67 No 2050

R1 368 000 R16 950 R335 R277

Balloon?

• Retail store account R3000, repayment R300pm

• Clothing account R7000, repayment R500pm

• Personal loan R10 000, repayment R650pm

• Credit card R30 000, repayment R2500 pm

How to use R1 000 to pay off R50 000

Debt repayment plan

Debt free by October 2021

May 2020 Increase retail store payment from R300 to R1300

July 2020 Retail account paid off, now you have R1300

August 2020 Increase clothing store repayment from R500 to R1800

November 2020 Clothing account paid off, now you have R1800

December 2020 Increase personal loan repayment from R650 to R2450

March 2021 Personal loan paid off, now you have R2450

April 2021 Increase credit card payment from R2500 to R4950

with

R1000

Credit Card payoff calculator

Debt free

25 years R53 600and later

interest rates between 20% to 25% pa minimum payment of

3% per month on reducing balance!

if you had a credit card balance of R20 000.how long would it take you to pay the balance off if you just paid the minimum amount each month?Q:

0

10 000

20 000

30 000

40 000

50 000

60 000

1 5 9 13 17 21 25 29 33 37 41 45 49 53 57 61 65 69 73 77 81 85 89 93 97 101

105

109

113

117

121

125

129

133

137

141

145

149

153

157

161

165

169

173

177

181

185

189

193

197

201

205

209

213

217

221

225

229

233

237

241

245

Capital Total Payment

Credit card payment

• You cannot meet your debt repayments• You want to protect an asset• Court ordered – once you enter you cannot exit until debts are PAID OFF• Make sure you use a reputable firm that uses the Debt Counselling Rules System

Don’t confuse debt consolidation with debt counselling/review

When to consider debt counselling/review

Hierarchy Debt/Investing

• 1st build emergency fund – R15 000• Allocate funds to debt repayment

• Start a TFI even if it is just R200 a month• Retirement – do an assessment, commit salary

increases• Mortgage – pay off faster

aim for R15 000

Goal = Months expenses

Keep your funds liquid:

• 32-day notice account

• Fixed deposit

• Mortgage pre-paid funds

Poll time…

Do you think you/partner may be retrenched this year?• Yes• No

How much do you have ?

Calculate how much you need and how long your funds will last

Severance package tax-free up to R500 000 – if not utilized before

UIF up to 12 months but depends on credits

Cannot access your retirement annuity

Don’t rush to settle debts – you need cashflow

UIF benefits: Depends on credits• One day’s benefit for every completed four days of employment as a contributor

• A contributor will be eligible to claim benefits for a maximum duration after beingcontinuously employed for four years.

• If a contributor has already drawn benefits other than maternity, the number ofdays for which the contributor is eligible will be reduced accordingly.

• Complete continuation form every 28 days to ensure regular payment – online

• Maximum monthly benefit = R14 872

• If you have been retrenched you need to provide your credit provider with your ID anda certified letter of retrenchment from the employer.

• There is a 90-day waiting period from the time the contract is initially signed beforeany claims can be lodged.

• The benefit would pay between 6 months to 12 months of your credit installment.

Don’t fall behind on your debt repayments until you have

claimed for credit insurance!

Before you use your package to pay off debt check your Credit Insurance:

Home loan• Covid-19 payment holiday – 3 months

• Can be reduced for a period of six months andpotentially extended up to 12 months

• Loan could possibly be restructured. This includesextending the term up to 360 months to reducethe monthly instalments.

Any extension will cost you in the long-run

Car finance

• COVID-19 debt relief will apply

• Beyond that speak to finance house to see what options are available

• Be realistic – can you afford your car?

• You can’t just hand your keys back!!

Keeping all my information in oneplace

A life book is a place where you store all your important documents

This should include things like:• Your latest bank statements and tax records• Retirement documentation• Investment policies• All your short-term insurance policies• Risk policies and long-term insurance policies• Your updated will• Birth certificates• Medical detailsIt makes it easier for your family if something happens to you.

Life Book

Ensure that a trusted family member or close friend knows where to find this piece of paper

Debt repayment:• https://mayaonmoney.co.za/2014/02/budget-way-debt/

• https://mayaonmoney.co.za/2019/03/listen-the-three-step-debt-repayment-plan/

• https://mayaonmoney.co.za/2019/02/should-you-use-a-lump-sum-to-pay-off-debt/

• https://mayaonmoney.co.za/2016/05/easy-debt-payment-strategy/• https://mayaonmoney.co.za/2020/03/when-to-consider-debt-counselling/• https://mayaonmoney.co.za/2020/04/how-credit-insurance-can-cover-your-debt/Reducing your home loan:

• https://mayaonmoney.co.za/2019/05/the-stubborn-home-loan-debt/Emergency fund:

• https://mayaonmoney.co.za/2018/09/the-best-place-for-your-emergency-fund/

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