As the festive season draws near, so too come the warnings from financial experts to avoid overspending…

And yet, without fail, too many consumers end up heavily in debt, even falling into deep depression as a result.

The South African Depression and Anxiety Group says there is a surge in calls over this period as people look for advice in dealing with the financial stress they face.

South Africans are already taking strain with the VAT hike, and ever increasing petrol prices, which has a knock?on effect on the general cost of living.

survey conducted by global research body, the Conference Board, in conjunction with Nielsen showed a five?point drop in South African consumer confidence in this year’s second quarter. And this was before the official recession figures had even been announced.

And so a vicious cycle begins: worries about debt feed into depression which results in knock?on effects in the rest of our lives – including the workplace.

Worries about debt feed into depression which results in knock?on effects in the rest of our lives – including the workplace.

A shocking report by the London School of Economics and Political Science last year revealed that depression cost South Africa more than R232bn or 5.7% of the country’s GDP due to lost productivity ? either due to absence from work or attending work while unwell.

We don’t know how much of this depression is the result of fears about debt, but with the financial strain faced by most middle and lower?income persons, it is undoubtedly a factor.

If you’re a consumer who either is drowning in debt or you feel as if you’re about to, we have some practical advice about how you can keep your head above water, at least for the foreseeable future.

Know your worth

‘Money can’t buy you happiness’, goes the old saying. Why does it always seem as if it’s people with lots of money who say this?!

The reality is that, according to US think tank The Journal of Consumer Research, an individual’s financial wellbeing is almost inextricably linked to overall well-being.

Many people who are now on the other side of their debt woes say it’s important that people realise debt isn’t the be?all and end?all of who we are.

Being in debt “doesn’t mean you’re a bad person, a stupid person, or a lazy person”, says US writer Melanie Lockert, who found herself deep in the red with student loans. Try to understand that you have nothing to be ashamed of.

Getting real

Once you have made peace with the issue, it’s time to start tackling the problem. “Do a thorough review of both your budget and your monthly spending,” says independent personal finance expert, Marc Joubert.

“Know where you’re overspending and consider where you need to be more disciplined,” says Joubert.

“Know where you’re overspending and consider where you need to be more disciplined,”

Cut out credit and loans

Credit and store card debt accounts for a huge portion of consumer debt in South Africa. Research has even found that many people use their credit cards to pay for basic monthly living expenses. But this is an especially dangerous practice, warns Joubert.

“Look at how you can work around certain necessary expenses. Carpool instead of drive on your own. Shop around for less pricey alternatives to your groceries,” he suggests.

It might sound insignificant but putting things like this into practice will soon reveal a drop in monthly expenses.

Spending alternatives

There are times when spending seems unavoidable, such as when the fridge decides to pack up in that awful week before payday. Before you reach for that credit card, do some homework on alternatives.

Could you make do with a second?hand appliance (at least until you’ve saved enough to buy a brand new product)?

Or consider a purchasing model such as rent?to?own (RTO). A contract of this sort offers greater financial flexibility. The customer pays a fixed fee each month for a pre-determined period and is able to upgrade, downgrade or cancel the contract at any time should their financial circumstances change.  At the end of the pre?determined period, the consumer is able to take ownership of the product.

Desiree Dickinson, a customer experiences manager at Teljoy, which offers this purchasing model for household furniture, appliances and tech products, explains that, “Rent-to-own offers consumers a way to acquire household items and other products without the risk of getting caught in a debt trap.”

Don’t be consumed by debt

The day?to?day demands of life mean that consumers might constantly feel as if they’re standing on the edge of a mountain, looking into a deep dark abyss of debt. So be realistic and wise in your choices and habits.

If you’re in need of debt counselling, visit the Debt Counsellors Association of South Africa where you will find information about accredited counsellors.

This article was first published by All4women on the 30 October 2018