Can You Pay Off Debt and Save Money?

Two of the most important financial goals to have is to pay off debt and save money, but both are not always possible, so which one should you be doing first? Or are you able to do both?

It may seem that it would make sense to pay off your debt first, especially when you are carrying a high interest debt but it is also just as important to have savings like an emergency fund so that you have money to fall back on if something were to happen and this way you won’t need to go into further debt. 

Here is how you can decide which one to do first or if you can do both at the same time. 

Pay Your Debt First?

If you are carrying high interest debt like a store card, credit card or a personal loan then it is a good idea to prioritise these first. High interest debt like this is hard to get out of and is usually the reason that many South Africans are spiralling into debt. 

With this type of debt, you should always aim to pay more than the minimum each month. This may require you to make cutbacks. Bringing down your debt means that you will pay less in interest and in the long run, will have more available to save. 

If you aim to plan off your debt first, then avoid any further debt as this will just make the situation worse. 

Should You Save First?

There are some good reasons as to why you should save first even if you have outstanding debt to pay off. The main reason is to build an emergency fund. When an unexpected expense comes up, you will be able to pay using your emergency fund and avoid getting into more debt. If you don’t have enough to cover the full expense from your emergency fund then you can at least part pay and use a personal loan to pay for the rest and limit the amount of debt. A personal loan usually carries a lower interest rate than a credit card, which makes it a better option if you have to go into some debt. 

If the debt you are carrying has a low interest rate, then it will make sense to put money towards your savings. You ideally need to have enough money saved up to cover between 3 and 6 months’ worth of your income. 

So What’s Best?

The best way to reach your financial goals is to do both if possible. You will want to get rid of debt and save money at the same time, so look at a way for you to split your money between the two. 

For instance, if you have budgeted R1000 for savings but are carrying high interest debt, then split it 50/50. It may mean that you are paying a bit more interest but you will gain peace of mind knowing that you have some money saved up. 

This won’t always be possible depending on your debt situation, so if you feel that it is more important to first focus on your debt and cut that down then do so. It all depends on your financial situation. 

If you are carrying too much debt, then it might be an idea to speak with a debt counsellor to get advice. They will help you create a payment plan and if you are over indebted then you may want to consider a debt consolidation loan. 

If you need help with debt, then keep reading for a plan to pay off your debt.

Your Plan to Pay Off Debt

You are not able to ignore debt because this won’t make it go away. If you want to get out of debt, then you need a plan and financial discipline. Here is a plan for you to pay off your debt, so that you can start saving and become financially healthy. 

What is Your Debt?

The first step into paying off your debt is to own your debt and find out how much debt you have. You will need to look at all your statements and find out exactly what your monthly repayments will be for the next month and how much you owe overall. It is also a good idea to get your credit report, which you can get for free. Make a list of all your debt from the lowest to the highest. 

Create Your Monthly Personal Budget

Once you know what your debt is, you will need to create a personal budget so that you can work out how you are going to pay your debt back and how long it will take. You need to look at your spending habits and see where you can save money. You may need to cut back on nights out, takeaways and so on. There are always areas where you can cut down and save even if they are just small savings as these will add up. 

Which Debt to Start With

When it comes to paying off your debt there are two ways to go about it. 

Paying the highest interest debt first will help you to save money in the long run, especially if the debt with the highest rate is also the one with the highest balance. This will take the longest to pay off, so you may lose motivation to carry on with this if you don’t feel like you are making progress, which is why the second way might be the better option. 

The second way is to pay your lowest balance first, which offers instant benefits. When you can pay off your lowest debt first, you will gain motivation to carry on tackling your debt and you will free up money that you can use to pay for your next debt and so on.  This can be the best way to start tackling your debt. 

Pay More than the Minimum

When you only pay the minimum on your debt you won’t get very far because of the interest rate. If you want to pay off your debt faster, then you should look at trying to pay double the minimum. Take a look at your budget and see where you can cut down so that you can pay more towards your debt. You can set up debit orders, which will ensure you stick to your debt repayment plan. 

If you feel you are over your head in debt, then speak to a debt counsellor that will be able to help you with your finances and pay off your debt. Another option is to opt for a debt consolidation loan, which will combine your debts into one and will give you one lower debt repayment each month, but you will need to make sure this is the right option for you. 

Do You Know How a Small Loan Works? Here is What You Need to Know

If you need cash, but are not able to afford or able to get a big loan then a small loan might be your answer. There are a number of reasons as to why people are not able to get larger loans. These reasons could be that you have a bad credit score, you are carrying too much debt or the interest rates stop you from getting a larger loan. However, you can consider getting a small loan if you need cash.

A small loan is able to help in a number of ways, so here is what you need to know about a small loan. 

Applying for a Small Loan

If you want to apply for a loan, then you will first need to find a lender to borrow from. Lenders will differ in terms of their policies and their minimum requirements, which you will need to meet in order to apply. It is then advisable to do some research and find various lenders that you can compare.

This is very important because the decision that you ultimately make has the potential to make or break your finances. You also need to be wary of scammers and make sure the lenders that you are looking at are reputable and legitimate. 

This can help to make sure that you do not get trapped in a high interest rate scam and find that you are stuck with an unaffordable loan. 

As there are many lenders out there it can often be daunting trying to find the lender that is right for you. However, you will find plenty of online sites that will do the hard work for you. With these sites, you fill out just one simple application form and they will match you with reputable lenders based on your needs. You will then have the ability to compare offers, interest rates and policies easier and choose the one that is right for you. 

So, What Affects the Outcome of Your Loan?

Once you have found a lender that you are happy with then you just need to apply. You will usually be able to apply for up to R5000 with these lenders, however, there are some things that can affect your application. 

The first is your credit score and credit report. These are both influential factors that affect your loan outcome because it shows the lender if you can pay the loan back, if you are good with debt, if you are worthy of receiving the loan and so on.  

Both of these can prevent you from obtaining a loan. Your credit history is easier to rectify as you will just need to pay your bills on time and get rid of any debt as quick as you can. Your credit score though will take longer to change for the better. 

However, if you have a bad credit score it doesn’t mean that you are never able to get a loan. You are able to find lenders that will be willing to lend you money even if you have a bad credit score, but prepared that they will usually charge you a higher interest rate. 

Another factor is the lender and they will influence how much you can get. They may have a minimum lending rule, which means that you are not able to borrow less than what they consider standard. 

If you want to get the best rates and have a good chance of getting a loan, then your credit score and credit report need to be good.

The Small Loans You Can Get

There are different types of small loans that you need to be aware of when you apply. 

Short Term Loans

A short term loan is an affordable choice for borrowing money and are relatively easy to secure. With these types of loans, you will generally just need a proof of income as this is used by the lender to determine how much they are willing to lend you. 

However, many small loan lenders now perform credit checks to ensure that you can afford the loan and are able to repay it so you don’t get yourself into a financial pickle. 

A short term loan is one where you have a short period of time to repay the loan, which can be anything from a month to up to 6 months. This means that you are able to get the small amount of money that you need and pay it off quickly, so you don’t need to carry debt around for years. 

Short term loans are a great option for an unexpected expense, an emergency or anything else. Also, these type of loans are paid out quickly and you can often receive the cash you need within hours after applying. 

Bad Credit Loans

If you have a bad credit score, then you are still able to apply for a loan. If you don’t have a credit score, then you are also able to use these types of loans. 

However, you need to be aware that these types of loans usually carry a higher interest rate because you are deemed to be a higher risk by the lender. 

If you don’t have a credit score or if you have a bad credit score, then you can still access a small loan that you may need. 

If you need a small amount of cash for whatever you need with flexible repayments, easy application and quick payout then a small loan is the perfect solution for you.

Time to Clean Up your Budget

When it comes to your budget, you should update it often so that you can make sure that your budget aligns with price increases and extra financial commitments you may have taken on. It’s time to take another look at your finances and make sure your budget is up to date. 

budget

Re-evaluate Your Expenses

There could be a number of things relating to your finances that may have changed recently. For instance, you may have received an annual pay rise or there could have been an increase in petrol prices, insurance premiums etc. or you may have debt that you are paying off. These type of things can result in either a gain or a reduction in your disposable income. If you have had a change in your finances, then your list of expenses will no longer be the same. 

You should then make a new list of your expenses which include your monthly necessities as well as personal loans, credit card debt etc. that you might be paying for. Also, make sure that if any of your expenses have increased in price that you have made the necessary adjustments. Deduct these expenses from your salary and you can determine if your budget is working or not.

If you find that you have a reduction in expenses, then you could put a bit more money into paying off debt or into your savings. If you find that you are paying for more things, then you may need to see where you are able to make cutbacks and readjust for the increases in expenses. 

You need to make sure that you have included every financial aspect into your budget so that it is true to your lifestyle. 

Check Your Insurance

You should go through your various insurance policies like car insurance, home contents insurance etc. and see if what you are paying is still providing you with the cover you need. If you have bought a new car recently then you should notify your insurance provider and update your details so that you have the right cover. 

The same is true if you have bought a new home or have added to your home contents as your premium may change to accommodate these changes. You need to make sure that your home is not over or underinsured. 

Also, it is a good idea to compare new insurance quotes from providers to ensure that you are still getting the best deal with the right cover for you. You may find that you are able to save a little each month on premiums by doing this once in a while. 

Keep reading for more ways that you can clean up your budget…

budget

Watch What You Spend

Keeping track of your budget is easier than ever nowadays with apps that do it for you. Spending money can get out of hand when you don’t have a budget or a way to track your spending. With tracking apps, you can record what you spend. 

When you track what you spend, you can make sure that you stay on budget and are not overindulging, especially when you just get paid. 

Check Your Credit Report

Once a year, you are entitled to a free credit report from the credit bureau. You may not think that you are in financial trouble, there is a possibility that a default or a judgement is present on your name that you are not aware of, there could be mistakes in your credit report that you should get fixed right away or someone may have fraudulently taken out credit in your name. 

You should review your credit report and make sure everything is in order. 

Get to Know Your Real Debt

When it comes to debt it can be easy for us to avoid it even though we are accumulating debt from different providers. You may think that you don’t really owe that much, but when you add up your credit card debt, store accounts, loans etc. you may find that it is actually a lot more than you thought.

You should review your debt often and have a plan in place to pay off your debt and avoid taking on more debt. Your debt repayment plan should form part of your budget so you know exactly what you will have as disposable income after everything has been paid. 

Check Your Bank Charges

Every year your bank may increase their charges, so you should have a look at what your accounts are costing you. You should see if they offer better priced products that suit your needs. Also, assess if the accounts you have offer benefits that you are actually using and get rid of any accounts that you don’t use or need that are costing you money. 

Having a monthly budget is important and you will need to review your budget every once in a while and ensure that it still aligns with your expenses, your debt repayments and your lifestyle.

Want to Save Money When Grocery Shopping? Here is How You Can

One of our bigger monthly expenses is food, cleaning supplies and other essentials and depending on your living arrangements, you may find that you have to buy these items on a regular basis. This means you end up spending a large amount of cash every time you go to the grocery store. 

However, there are ways that you are able to save money whilst you are doing the grocery shopping. Here are some tips that will help you to spend less money every time you go food shopping. 

Don’t Go Hungry to the Store

This may sound odd, but have you ever thought that you might be spending more money especially on quick snacks when you are hungry?

One way that you are able to avoid temptation and to only get what you actually need is to go grocery shopping on a full stomach and never head out to the grocery store when you are hungry. This can help you to avoid buying snacks and fast food. You can then save money and add a little more to your monthly budget. 

Keep Shopping to Once a Week

The majority of us will decide that we will go get groceries regularly, but a lot of us fall into the trap of taking extra trips to our favourite stores, especially when they are close by. This means that we end up buying extra items, sale items and food that we don’t actually need at that time. 

To avoid this trap and spending more money, you should try and only go to the shop once a week and have a plan in place. You will need to make a list of the things that you really need and not what you want. If you can stick to your once a week list, you might be able to save cash each month because you can skip those impulse buys that look tempting in the store. 

There are more tips that could help you to save money…

Plan Your Meals

You can plan ahead before you hit the shops by making a meal plan for the week and making a detailed list of the items you need. The list should include your drinks, any ingredients you may need or any pre-packaged meals you might want to have in advance. 

You will then have a handy list of everything that you need to get when you head to the supermarket and can avoid items that are more of a want than a need. 

Also, by having a plan in place beforehand of the things you need for the week, you can be more careful about what you purchase and buy the more affordable options or the options that are on special, which means you can save money. 

Look for Discounts

Many of our supermarkets will have free ‘shopper cards’ available and if your favourite store has one then you should get it. These shopper cards can give you access to further discounts on selected products and with some of them, you can earn points on your shop. These points can then later be changed to a cash voucher for the store, which means you can save money on another shop in the future. 

Have a Calculator Handy

If you get to the checkout and are surprised by the cost of your shopping, then a great way to watch your spending is to shop with a calculator or an app. 

You can add up the price of items as you place them into your trolley and you will then know what you will need to pay before you reach the till. This can also help you to stay on track and inline with your budget. 

You can use your calculator on your phone or you may find there is an app available for your store that can help you to tally up your purchases. For instance, Pick n Pay and Woolworths have apps and you can make lists on the app before you head to the store so you know what you need to get and what it will cost.

It can be tough to save money, but we have to find ways to save, especially with items going up in price lately. Try these tips and you may find that you can spend less on your food shopping and stick to your budget. 

When is the Right Time to Take a Personal Loan?

In an ideal world, you will never have the need to take out a loan, but life is full of surprises and can be expensive, so you never know when you may need some extra cash.

When an unexpected expense crops up, it is easy for us to think that we need to take a personal loan to cover these expenses. So then when is it the right time to take a personal loan?

Here are some points that you should check off before you apply for a personal loan. 

Do You Really Need It?

An essential purchase can be classified as one that is necessary in order for you to carry on living your everyday life. You may need a loan for car repairs so that you can carry on getting to work for instance, but a new TV isn’t an essential purchase that would warrant a personal loan. 

You are only able to borrow so much money and every time you take a loan, it will reduce the chance of you getting another. If you then take a personal loan to pay for a non-essential item like a TV, then you will reduce your chances of getting a personal loan when you really need it. 

You should then ask yourself if the purchase is necessary. 

Are You Going to Improve Yourself?

The best investment that you can make is one in yourself and money that is spent on upskilling and training is money well spent. If you know that having a certain qualification or skill will improve your employment, then a personal loan can make sense.

Not only is education a good investment but having the right tools or equipment for your career can also warrant a loan. 

Do You Have a Solid Credit Score?

If you have a below average credit score. i.e. below 500 then you probably shouldn’t be applying for a personal loan, which means you should work at improving your credit score. A good credit score is one above 720 and this will mean you can benefit from a lower interest rate, which results in you paying less over the life of the loan. 

Also, when you have a good credit score it will be easier to secure a mortgage, as a good credit score shows that you are able to manage debt effectively. 

Keep reading for more things to check off before you apply for a personal loan…

Are You Able to Borrow from a Reasonable Lender?

You may come across lenders that will offer you a loan where others won’t. Irresponsible lenders don’t have an issue with giving you debt that they know you may not be able to pay off. The interest rates on these loans are also high and ensure that if the odd customers default they are still able to cover their costs. 

You need to be able to borrow from a reputable lender that has your interests in mind. Reputable lenders will assess if you are able to afford the loan and if they find that you can’t then they may reject your application. This is to protect you and your finances, so it isn’t bad news, it just means that you need to look at improving your finances so that you can get the loan. 

Are You Able to Pay It Back?

This should be common sense, but when things get tough many people will take a loan even though they know they are not able to pay it back. 

Taking on unmanageable debt is a big no. A reputable lender will make sure that you are able to afford it and that you are not saddled with debt you can’t handle. 

The most important thing that you need to check before you apply for a loan is to make sure you can afford it and to only borrow as much as you afford comfortably. Make sure that you borrow from reputable lenders with competitive interest rates. 

Is the Risk Worth It?

Personal loans have to be paid off within a certain amount of time and if you fail to pay then the lender can issue court action against you and even have you have blacklisted. This will cause damage to your credit score and make it extremely difficult for you to apply for a loan in the future. 

You need to read and understand the terms and conditions of the personal loan contract and be aware of any penalties. 

Also, have a look at the kind of interest rate offered. There might be a promotional rate that can start low but then may jump to a higher rate after a certain period of time. 

A personal loan could be what you looking for as long as its an essential purchase or investment. When you apply for a personal loan make sure it is with a reputable lender and that you have read all the small print. 

Were You Rejected for a Loan? Here are the Reasons Why

There are thousands of loan applications that are rejected every day, so if you have been rejected for a loan then you are not alone. 

Knowing the reasons why you were rejected for a loan though are not often divulged by lenders and banks as they each will have their own approval system in place. However, there are some common reasons as to why your loan application was rejected. Take a look at the reasons so that you know what you can do and improve on being able to get your loan approved in the future. 

Rejected? Here is Why

Your Credit Score Could Be The Culprit

If you are in debt and have managed your debt poorly then it will show in your credit score. Your credit report and score can be accessed by lenders and if they don’t like what they see then they will reject your loan application. You are able to get your credit score and report so that you can see where you need to improve, so that you have a better chance of getting a loan in the future. 

Been Blacklisted?

If you have been blacklisted or if you have a judgement against you then you will most likely be rejected for a loan. There are some online lenders that offer assistance and loans to those have been blacklisted, but be prepared as you may have to pay a high interest rate. 

If you are under debt review, then generally credit is declined as the process focuses on getting you out of debt. Once the debt review process is complete then you will be able to access credit again.

Have a Garnishee Orders?

This is court order where deductions are made on your salary by your employer in order to settle debt that you may have with a third party like a store account, a bank, a short term lender and so on. This will show that you are bad at repaying money that you owe and will most likely show in your credit report, which means that lenders will reject your loan application. 

Still wondering why you have been rejected…keep reading

You Can’t Afford It

When you apply for a loan, you will need to supply the lender with some information, which will include what you earn. Reputable lenders will assess if you are able to afford the loan and make the loan repayments. If they find that you won’t be able to keep up with the repayments because you have too many outstanding lines of credit, bills and such then they will most likely reject your application. 

Your Job Might Play a Role

There are lenders who will refrain from lending money to those that potentially may not have a stable or future income. This means that contractors, freelancers and even small businesses may have a hard time getting credit. Your income will be looked at to see if it is sustainable and based on this a lender may decide to accept your reject your loan application. 

If you are a job hopper, then you may not be looked at favourably because lenders might think that your job is not secure. You might also be rejected if you haven’t been in your current position for long as lenders prefer to see that you have had a stable job for at least three months and want the bank statements to show this.

You Have No History

If you have never taken a loan before then you may think that it is a good thing, but actually, this means that lenders have no way of knowing how good you are at repaying credit, which means they will be hesitant about lending you money. If you don’t have any credit history then you could open a store account or apply for a credit card, make small purchases and be prompt at repaying. This will help you to start building a good credit history and lenders will be more willing to grant you a loan. 

Just a couple more reasons…

Is Your Info Correct?

When you fill out your loan application you have to be honest. This means you shouldn’t overinflate what you earn and be truthful about who you owe money to. If you lie, then you will be rejected and you could even be charged with fraud. 

Age is Not Just a Number

In order to apply for a loan, you need to be over the age of 18 years, but you can also be too old for a loan. Generally, if you over the age of 75, you won’t be able to borrow a large amount of money like a mortgage, but you might still be able to get a short-term loan. If you are still earning money over the age of 75 then you could still qualify for a loan. 

There are a number of reasons as to why your loan application might be rejected, but if you have a good credit score and history, have a steady income and show that you can make timely repayments then you will be able to get the loan that you need. 

The Best Small Short-Term Loans for You

If you only need a little cash with easy repayment terms then we have found the best small short-term loans for you that will suit any purpose that you may have whether it’s just to tide you over, pay for something unexpected or anything else.

online loans

Here are the best small short-term loans for you.

Boodle

With Boodle you are able to get quick and easy loans of up to R4000. The process is simple. All you need to do is use their dial to select the amount that you wish to borrow and for how many days, which can be up to 32 days. This will show you the full repayment that you will need to make. Once you are happy, submit and fill in the simple application. Boodle will then verify your information before they offer you a loan to ensure that you don’t get into a financial pickle. Then you just wait for your loan to be paid to you. The majority of loans from Boodle are paid out within 10 minutes. 

Simple, easy and quick short-term loans for you with Boodle. If you would like to apply, just Click Here. 

Wonga

With Wonga, you are able to borrow up to R4000 as a new customer and existing customers can borrow up to R8000. Repayment terms are flexible with up to 6 months to repay. All the information that you need including the interest and your repayment amount can be seen clearly, so there are no hidden fees that you need to worry about. Once you have chosen your amount and your period of time you want to borrow the money for, then just fill in the application, wait for your approval and your loan is transferred directly into your bank account. 

If you are looking for a short-term loan that works for you then apply with Wonga by Clicking Here.

Dunami

You can get small, hassle-free loans from Dunami. Take a loan from R1000 to R5000 with a fixed 6-month repayment period with a max APR of 212%. Their loan application is web and mobile enabled, which means you are able to apply anytime and anywhere. You will receive a fast and instant onscreen decision and the money is transferred directly into your bank account. There are no meetings, phone calls or paperwork, making Dunami loans hassle-free. 

If you are looking for hassle-free loans with instant approval, then apply with Dunami by Clicking Here.

These are the best short-term loans that you can get right now and with their easy applications, you can get the loan you need. Keep in mind that you should only take a loan if you are able to afford it and repay it on time, so that you can avoid falling into a bad financial situation. 

5 Things You Can Do with a Personal Loan

The fact is that everything we do in life revolves around money and even though going into debt is never a good thing, you may find yourself in a situation where you need some extra cash. 

Personal loans are perfect for this as they are unsecured loans that usually carry a lower interest rate than your credit card. Personal loans can be used in a number of ways and can be used as a back up when you have an unexpected need for money. 

Here are 5 things that you can do with a personal loan.

Pay for Your Big Day

Weddings are a big deal and the fact is they can be quite expensive with everything that you need like food, a venue, music and more. 

Taking a personal loan to pay for your wedding is not the best financial decision, but it can make the payment process more convenient. Instead of using multiple credit cards with multiple interest rates, you can pay for everything from one lump sum of money and just focus on repaying the personal loan each month. This will streamline your repayments as you will not need to juggle multiple repayments. 

Using a personal loan for a wedding should be your last resort and you will need to carefully weigh up the pros and cons as you do not want to start your married life drowning in debt, so make sure you have a plan in place. 

Out of Debt with Debt

One way that you can use a personal loan which is beneficial is to consolidate debt, which is where you move multiple repayments into one whole payment, which can make things easier. By doing this, you will not need to balance multiple payments and interest rates as you will just have one payment and one interest rate to deal with each month.

There are more ways that you can use a personal loan below…keep reading

Invest It in a Start-Up

There are a number of start-up businesses popping up and this is creating a lot of self-made millionaires. You can get in on the action by talking to people and choosing a start-up that aligns with your own passions and interests. 

However, you shouldn’t just jump in, you will need to do your research, get to know the founders and understand the potential in the market and so. You can invest small amounts into various start-ups so you don’t have all your eggs in one basket.

Rent It

A great way to make money is by renting things and it is an easy way to make some cash on the side.

You can then buy what people need with your personal loan and then rent them out like cars, sound equipment, cameras and so on. The rental fees that you get from these items can then be used to pay off the loan and once it’s paid off, you can keep the money for yourself. 

Invest in Yourself

You don’t need to just use a personal loan to buy physical things as you can use it to invest in yourself as well. Use a personal loan to raise your education level and get a degree or a masters or use it to do a short course in something that you love. 

Also find out what additional skills you may need in your current industry so that you can climb your career ladder. This is a great way to use a personal loan as you will be able to see a return in your life as you are investing in yourself so that you can advance yourself. 

Personal loans can be used in a variety of ways and can be an effective financial tool when they are used in a smart way. Before you take a personal loan, you will need to weigh up the pros and cons and decide if it is worth it. You are able to apply for the best personal loans online with ease and you can compare offers from various personal loan lenders so you can get the best deal.

5 Reasons You Should Use a Personal Loan and Not a Credit Card this Season

 

Ideally, you would have already saved up for your festive shopping, but if you don’t have enough in your savings for all the holiday expenses, you may first think you will use your credit card. However, this might not be the best option, especially if you are already carrying around credit card debt.

A better option might be a short term personal loan and here are the reasons why a personal loan could be the best option for your holiday expenses.

christmas personal loan

You Know What You Will Pay

With a personal loan, you will borrow a fixed amount of money. Once you have been approved for a loan, your interest rate, the period and the repayment terms will not change over the course of the loan.

You are informed beforehand what you will need to pay each month, which will not change. This means you are able to budget for your repayments a lot easier.

With credit cards, on the other hand, if you don’t pay your balance off in full each month, the repayments you need to make can fluctuate and you will need to pay fees on top of this.

The Interest Might Be Lower

Generally, the interest rate that is paid on a personal loan is lower than your credit card rate. This means that you are able to save money in the long run when you opt for a personal loan for your holiday expenses.

It is important that you shop around for a personal loan that has a low rate, in order to make it beneficial.

You Can’t Spend More

With the festive season, there are many expenses to take into consideration like presents, travel, decorations and more. Putting all of these costs onto a credit card can make these expenses even more expensive because of the interest. Also, with a credit card, you can keep spending, paying it back and spending the amount again and so on, which can lead to greater debt.

With a personal loan, you get a fixed lump sum and you are not able to borrow more on top of this. This means you can avoid overspending, but you should only borrow the amount that you need and can afford.

A good idea is to make a budget before you borrow any money and see how much you will need and stick to this.

personal loan

No Surprises

The interest rate and terms of the loan are fixed and they will not change for the period of your holiday loan. You also know what you will need to repay from your household budget each month, so there are no surprises.

You will find credit cards offering 0% interest for a certain period of time, which is tempting and can be a good option for some. However, this will only work if you are able to pay off your total balance in full before the promotional period ends, otherwise, you start to incur interest and possibly other fees.

There is an End

A personal loan is perfect for short-term financing as it has a fixed term, which means you will know exactly when the loan will be paid by and then you are done with the obligation. Whereas with a credit card, you can keep using it, which means you may just keep adding to your debt and not really paying it off.

The best thing to do though is to budget and save throughout the year for Christmas, but if you are in a pinch and need some money then a personal loan could be a good idea for you.

Smart Festive Spending

The festive season is upon us, which means you are probably already budgeting with your 13thcheque or your performance bonus. The fact is though that the majority of these funds will go towards shopping and buying all those festive treats, gifts and more. You may find that you are finally able to afford those items that you have had your eye on all year long.

However, you should actually want a portion of this extra cash to be saved and you definitely should do this as having a small cushion in the New Year will help to relieve extra pressures that come after Christmas like school fees and other such things.

christmas shopping

There is nothing wrong with spending money over the festive season, but with the summer holidays and the festive atmosphere, we do have a tendency to get carried away. You then need to become a savvy shopper over the festive season so that you don’t end up overspending and in a world of debt.

Here are some savvy shopping tips that you can use over the holidays.

Smart Festive Shopping

The first thing that you need to do is to create a budget for the season and create a list of the things that you need. You will need to stick to this list, which should include gifts, drinks, food, any travel, socialising, decorations and so on. The budget that you have should be divided between these items and you will need to make it work and stick to it.

The next thing that you should try and avoid is last minute shopping. If you are able to, you should try and buy ahead of time as this will make sure that you are not left with limited options. Buying ahead of time can help you to avoid panic buying and also spending more than what you can actually afford.

Another good idea is to buy your groceries and food in bulk over this time. You will find that a number of supermarkets will be offering discounts on their prices, so you will definitely be able to find some great deals.

Keep reading for more savvy tips when you are shopping this Christmas…

The one thing that you need to avoid over the festive season is spending pressure. This can come from your children and your family, which can result in you spending more than what you can afford. You need to set expectations beforehand and ensure you don’t fall prey to these pressures. You know what you can afford and you have a plan in place with your list and budget, so stick to it.

christmas budget

The best time for you to cash in on any loyalty points, discount coupons or anything similar is during the festive season. If you earn points, for instance, with your bank and have been saving them throughout the year, then this is the best time to spend them. Also, look online for discount codes for online shops that you are going to use as these will also help you to save money.

If you decide that you will be using your credit card to buy all your festive items then you need to be disciplined, as overspending is a lot easier with a credit card. You also need to make sure that you are able to clear your credit balance in full in the New Year. This is because credit cards can be expensive when they carry a balance and store cards are even worse as they charge a higher interest rate. You need to make sure you can clear these in full and you have budgeted for this.

An option that you do have is to take a personal loan for the festive season, that is equal to the amount that you want to spend. These personal loans will have a lower interest rate than your credit card and the repayments terms are flexible. You should only take a loan if you can afford it and pay it back on time, preferably in the New Year.

If it is possible, you should avoid touching your rainy day savings over Christmas, as this will just put you back financially.

The festive season is about giving and seeing family and friends and even treating yourself to an item or a much needed break, but it doesn’t mean that you have to spend every last cent you have. You just need to be a savvy shopper, have a budget and stick to it. This will then give you a great financial standing for the New Year.