The price to pay for love

(Duncan Alfreds, Fin24)
(Duncan Alfreds, Fin24)

Cape Town - Valentine’s Day may be about chocolates, flowers and love, but one has to wonder how many couples can afford the costs associated with love, cautions Wendy Monkley, head of marketing at DebtBusters.

The Consumer Bureau Monitor Report (CBM), released by the National Credit Regulator (NCR), indicates that 54% of credit active consumers in South Africa are struggling to meet their debt repayments.

“So far 2016 is already proving to be a testing time for the average consumer. Food prices have begun to rise as a result of the drought, electricity increases are eminent and debt repayments have increased as a knock on effect of the repo rate hike in January," said Monkley.

"Add to this annual increases in school fees, insurances and general living expenses and you have a heart-breaking situation where many South Africans can no longer meet their monthly financial obligations.”

She offers a few tips to avoid choosing between breaking the bank and breaking your loved one’s heart:

- The effort you put in to making your loved one feel special can have a greater impact than the amount of money you spend;

- Make your own Valentine's card to impress your partner with the effort you put in;

- Eat in: Create an intimate setting at home. You’ll be able to make great food at a fraction of the cost compared to what you would pay at a restaurant;

- Manage expectations: You know your partner better than anyone else. Confirm you are both on the same page in terms of Valentine’s Day monetary expectations and avoid the stress of "high expectations";
- Budget: Valentine’s Day, just like other romantic holiday, comes around every year. It may be too late for this year, but remember to budget for next year and save towards any "big ticket" gifts like engagement rings so that you do not over-spend;

- Marriage: For those thinking of popping the question this Valentine’s Day Monkley warns that marriage is a decision which you need to make carefully. There are lots of financial implications.

"You need to think with your head and not with your heart before saying "I do", especially for those that are entering into a marriage in Community of Property (COP),” she cautions.

When married in COP, all of your partner’s debt will become your debt too. This includes all the debt that was accumulated up to and even before you were together.

"Regardless of the status of your credit score, you will be penalised for your partner's poor credit score. If you wish to take out a loan, you are more than likely going to pay a less favourable, higher interest rate on your debt if your partner has a poor credit rating," she says.

If your spouse has a judgement, creditors can clear out monies from your personal account even if you do not have a joint account or they can garnishee your income to pay off the judgement.

If your partner has a small business that runs into financial trouble, the onus is on them to pay back the debt, and in turn you if they can’t.

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