Debt is essentially the amount of money that you owe someone or an institution. The most common sort of debt that people have is fixed-term debt – things like cell phone contracts, home loans and personal loans. Typically, the interest rates on these loans don’t change for a set number of months or years.

It’s best to do your research and always compare your options. Scams even have websites. The quickest way to verify the legitimacy of a loan company is to look for their FSP number, which you can then check at Financial Sector Conduct Authority.  

Many of us are taught poorly about money. But of course, being South Africans there are many of different factors at play that further complicate our indebtedness.

Personally, I’ve been terrified of getting myself shackled to an insane amount of debt – not only because debt can be debilitating as it is for many South Africans, but it’s also humiliating. We all know someone who’s always borrowing money or doesn’t have enough money for their needs. 

The Mail and Guardian reported in 2021 that South Africans who earn between R5k-R20k are crippled by debt, with 60% of their monthly income going towards paying back debts. 

The good news is that not all debt is bad – a student loan, for example, isn’t inherently negative as it is an investment in one’s education. Buying a house falls into the same bracket, given that property is one of the biggest assets a person can acquire in their lifetime.

It’s not a secret that the world is in unprecedented financial times, which have resulted in increased borrowing and a surge in people having more than one job. These are difficult times, but there are ways to mitigate these stressors. 

As with most things, it is all about moderation and seeking out financial advice. I don’t say that to be patronising because given the varying ways that the world is on fire, so I’m going to put my money where my mouth is with some additional sources that you can use for better educating yourselves and hopefully, your loved ones.

Additional sources: 

• https://www.incharge.org/debt-relief/debt-management/debt-management-program-template-debt-relief/
• https://www.bankrate.com/personal-finance/debt/secured-vs-unsecured-debt/
• https://debtreviewcentre.co.za/debt-review-simplified/
• https://businesstech.co.za/news/banking/586100/these-income-brackets-in-south-africa-owe-the-most-debt-right-now/