The power of a monthly budget, and the financial benefits of taking the time before your next pay date is to assess your personal budget for the financial month ahead. Affordability and costing on your disposable income is the key to surviving the downgrading of our economy that will spill over, effecting all consumers over the next few months in a negative way.

At CDS we find that a large percentage of consumers do not stick to a monthly budget for various reasons. We came to understand the largest percentage of middle income consumers that they do not understand how to budget. Asking these consumers why they do not budget, their answer were simple they were never showed how to do a budget, no one took the time to show them what a budget means.

In this week’s blog we want to focus on your personalized budget and how we can help you create financial freedom by showing you how easy it is to adapt and adjust to a new monthly routine taking and making time for your budget in the various income categories, ie: individual income, joint income, married out of community of property with joint commitment to your spouse’s expenses and additional income received, household expenditure, financial obligations towards assurance, insurance etc., and debt obligations that must be met every month.

We also found a large percentage of home loan owners was paying monthly bonds and did not know how to calculate the interest on their home loans. This is where we can share valuable information to help you maintain a healthy debt profile and ensure affordability before you sign for your new home loan. It is so important that you can afford the monthly interest should you fall into arrears and must apply for a debt review application. This information will help you to understand how Consumer Debt Support (CDS) can help you restructure your debt repayment that will ensure we cover the interest of your home loan in the new payment plan. If the interest is not covered, the debt counsellor will find it difficult to negotiate a reasonable, affordable payment plan on your bond and obtain a consent order that will ensure peace of mind when you can no longer afford the contractual agreement of the bond.

Furthermore CDS found consumers that bought a new vehicle did not have the knowledge to understand how to do a budget and affordability understanding of their financial planning to do the calculations before speaking to a dealer where they bought a used or new vehicle. Consumers left the budgeting to the dealer with the information of expenses leaving out other essential expenses that was not thought of when doing the application for credit at the time. This leaves the consumers vulnerable of the banks coming with their collection agents to take Voluntary Surrender possession of the consumers vehicle, which then excluded this vehicle from a debt review application.

The bottom line is that countless vehicle owners is left in a panic not being able to afford the second and third payment of their new vehicle because the full impact of the budget was not taken into consideration before buying the vehicle or new home.

Consumers applying for personal loans or in-store cards credit agreements we at CDS see the same problem: the lack of budgeting when doing the calculating of affordability of that new loan. Receiving the quotation from the creditor declaring the monthly repayment, total amount calculated interest, total amount service fees on the full contractual term until the debt is fully paid back, should enable you already to do your personal affordability budget. In our findings it is a real fact that these consumers just accept the quotation because they’re desperate for that loan to pay out into their bank accounts, they do not understand the impact of the new loan added to an already most likely over-indebted budget that will send shock waves to their wallets when the first payment is due, which boils down to not being able to afford another personal loan, credit card payment or in-store card payment over and above your other credit agreements that must be paid and household expenses your forgot to calculate in a moment of being desperate.

Consumer Debt Support understand the financial pressure consumers are facing, now with double junk status will most likely be more on the increase that consumers cancel their medical aids, vehicle insurance. CDS can help consumers who are already so vulnerable and desperate to make the right decisions before much damage is done. Cancelling your medical aid can have serious consequences when for example you are on chronic medication or suffer from depression, in other cases you maybe need a good hospital plan for the family that is more affordable. CDS ensure that we have professional practitioners in the industry where we can refer you to them so that they can you the get help with these service agreements and go to a lower premium plan on your medical aid etc, only a registered insurance practitioner can assist you with.  Protecting your family always takes priority.

Our objective in today’s blog is to show you how easy it is to do your budget to help you keep record of your debt exposure on a monthly basis. Outstanding capital debt balances owing to your creditors is very important to stay in control of your financial profile when your creditors should be sending you the correct outstanding balance on outstanding credit agreements. This budget you can do on Excel, and every month just change the totals where applicable, do your budget as per your available disposable income. Hope this guide will help you to partake monthly investing in your personal financial well-being and taking control back of your take home pay.

Budget:

Other Income

YOU                                                                                       SPOUSE

Income You                                                                        Income Spouse
Bonusses                                                                             Bonusses
House allowance                                                              House allowance
Interest receive                                                                Interest received
Maintenance                                                                     Maintenance
Overtime                                                                             Overtime
Personal gifts                                                                     Personal gifts
Rent received                                                                    Rent received
Second job                                                                          second job
Subsidies and grants                                                       Subsidies and grants

Total Income: _____________________

Deductions – salary deduction

PAYE                                                                                      PAYE
UIF                                                                                         UIF
MEDICAL AID                                                                     MEDICAL AID
PENSION                                                                             PENSION

Other salary deduction

Loans                                                                                    Loans
Union Subscription                                                          Union Subscription
Insurance                                                                            Insurance
Group life                                                                            Group life
Funeral                                                                                 Funeral
Tax (SITE & PAYE)                                                             Tax (SITE & PAYE)
Garnishee / Admin order                                              Garnishee / Admin order
Other                                                                                    Other

Total deductions: ___________________________

Nett Pay: _______________________________ (take home pay)

House hold commitments:

Financial commitments:

Medical                                                                                Medical
Rates and Taxes                                                                Rates and taxes
Rent                                                                                      Rent
School fees                                                                         School fees
Telephone                                                                          Telephone
Toiletries                                                                             Toiletries
Transport                                                                            Transport
TV license                                                                            TV license
Water & Electricity                                                           Water & Electricity
Entertainment                                                                  Entertainment
Security                                                                                Security
Family expenses                                                              Family expenses
Pool chemicals                                                                  Pool chemicals
Body corporate levies                                                    Body corporate levies
Other                                                                                    Other

Total: ____________________

Household Expenses

Assurance                                                                           Assurance
Credit insurance                                                               Credit insurance
Credit life insurance                                                        Credit life insurance
Pension & Risk Benefits                                                  Pension & Risk Benefits
Bank charges                                                                    Bank charges
Bread and milk                                                                 Bread and milk
Cellphone                                                                          Cellphone
Clothing                                                                             Clothing
Contingencies                                                                  Contingencies
Domestic worker                                                             Domestic worker
Groceries and cleaning                                                  Groceries and cleaning
Insurance                                                                          Insurance
Meat                                                                                   Meat
Land line phone                                                                Land line phone
Internet                                                                               Internet
Sports                                                                                   Sports
Gambling                                                                             Gambling
Cigarettes and liquor                                                      Cigarettes and liquor
Petrol                                                                                    Petrol
Children pocket money                                                 Children pocket money
Child stationary pm for year                                        Child stationary pm for year
Parking at work etc                                                          parking at word etc
Car Maintenance                                                             Car maintenance
Home entertainment                                                     Home entertainment
Univercity / tech fees                                                     Univercity / tech fees
Creche                                                                                Creche
Boarding fees                                                                   Boarding fees
After care                                                                           After care
Alimony / maintenance                                                   Alimony / maintenance
Dry cleaners                                                                      Dry cleaners
Chemist                                                                             Chemist
Church                                                                               Church
Social club                                                                         Social club
Provision for savings                                                       Provision for savings
Doctors bills                                                                      Doctors bills

Total commitments: _________________________________