Check before you use credit...

2017-07-20 06:00

Author Paul Coelho once wrote: “People are never satisfied. If they have a little, they want more. If they have a lot, they still want more. Once they have more they wish they could be happy with little, but are incapable of making the slightest effort in that direction.”

When I started work, it was milestone in my life, and after receiving my first cheque, I exchanged it for cash at the Elite store in Rylands.

We had to sacrifice about 30% of the salary on groceries before reedeming the remainder for cash.

I was never concerned nor smart enough to invest a portion of my income for a nest egg that could have been yielding fruits and giving me the best value for my money today.

Any earnings from part time jobs have been useful as extras, evidently my guidance teacher failed me in financial management abilities.

A few months ago, I purchased property in Nyanga, with all the expenses like transfer duty, legal fees, electrical certificate and a deposit having been procured via a personal loan from the bank.

I have to repay this over the next seven years. To apply for the personal loan, I spoke to a consultant, because I have been saving and investing regularly with them in the past.

My application for a loan was appproved.

The interest rate took more than I had bargained for.

I would advise anyone to calculate the interest before entering into a financial commitment.

Since the seller of the property is my cousin, this meant the exchange process was less complicated thatn would have been the case with a stranger.

The most rewarding feeling for me was negotiating successfully for the loan interest to be a fixed amount.

Before buying the property, I had bought myself a car and after three years and 60 000 km later, the free service has reached its limit.

Reality is now sinking in as frightening thoughts rush through my head.

I have to incur the direct costs of new tyres, repairs, replacement, service, let a lot alone the high cost of fuel and oil.

My fully comprehensive insurance policy premiums have increased by ten percent because I live in Nyanga, which is considered high risk and dangerous.

Now I have to make use of my credit card for everyday shopping.

So I’m floating in cash as I can withdraw cash from the ATM. My accounts are linked to my phone, and all I see is the interest charged on my credit facility, sometimes twice a month.

One Saturday I had to attend a funeral, and realised that I did not have a suit, I rushed to a shopping mall and bought new clothes.

I also indulged in a new phone on impulse. How naïve can that be.

Feeling cornered and choking on debt, I thought it wise to ask them to freeze my credit facility until it was paid off.

Not a wise move really, as I’m still accountable for the instalments.

Ok I have a small long term investment portfolio, a retirement annuity of regular saving and that will not be enough for my life in old age.

My expenses running a home, the car and my account are fix for now but we all know that commodity prices are rising. The Municipality rates with new water restriction are a reality.

Research more on antinuptial contracts like community of property, out of community of property, out of community of property with accrual before you say I do as these contracts are a financial setback when the adorations of marriage have ended.

It would have been useful to those like me to have learned financial management skills earlier in life.

However, I’ve learned to search for more information before getting indulgent.

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