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Stay on track by taking control of your spending

2019/07/03

Stay on track by taking control of your spending

Posted in category: Consumer Education

When times are hard and money is short, it's tempting to skip some account payments so that you have money for other urgent expenses. It doesn't help to promise yourself that you'll make up the arrears in the month - you don't know what could happen then, and before you know it, the problem has compounded.

Here are three big reasons why it's important to keep your payments up to date:

  • Missing payments is bad for your credit score. Even paying one day late counts as a late payment.
  • You could be charged an arrears interest. This is interest that is charged on the outstanding amount.
  • Your credit provider could take legal action and you could lose your asset (e.g. car).

Keeping your accounts in good standing requires discipline and good money management. Here are some tips to help you stay on track:

  • Draw up a budget and stick to it. Make sure that your account payments are a priority in your budget and set spending limits for your day-to-day shopping.
  • Know the difference between wants and needs. Expenses like accommodation, account payments and insurance are essentials, while airtime/data, entertainment and takeaways are items you can live without or cut down on.
  • Don't shop when you're feeling emotional or hungry - that's the time when you could be tempted to waste money on things you don't need.
  • Avoid borrowing money to pay off other debt - this tends to get you further into debt because of additional interest payments, etc. If you keep running out of money before the end of the month, you should think about ways to spend less rather than borrow more.

It can be difficult to choose which expenses should be paid first, but keeping your accounts up to date is worth it in the long term.

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