Times may change but values don’t, or do they? Many years ago when my heart was set on a brand-new bicycle with a basket and tassles, I knew that the power of my will alone was not going to see me pedalling this gorgeous bicycle — it was going to require some serious effort on my part too.
The ticket price seemed stratospheric and I was not earning any money. I consulted my parents who made it clear that there was no such thing as a free ride, but that they would help me try to make this dream come true.
We did the calculations and it was obvious that I was way off target. My mother suggested that I start saving the few rands I was lucky enough to receive as pocket money, thereby giving my bicycle fund a small start. It was a revelation. If you stop spending, you will automatically start saving. Obviously, reducing my expenses alone was not going to be the answer unless I was prepared to wait until I was 60, by which point mountain bikes would be so last season.
I started doing odd jobs for neighbours and family. I washed everything from cars to pets and mowed more lawn than my school’s caretaker. The income from my jobs, and the fact that I put it away, was accumulating rapidly and I was not far from the target.
One day I came home to find my dream bicycle leaning up against the kitchen table. I rushed off to my room to get changed so I could take the bicycle out for a ride, pausing briefly to check my bicycle fund. Every last cent was gone. Like my parents said, you get nothing for nothing.
The point is that I don’t see that message being sent to the youth today. Today’s youth grow up without learning the real value of money. They can spend with ease, yet find it impossible to save. They are fluent in instant gratification, but struggle with the reward of perseverance. Handouts build expectations that will come tumbling down in adulthood. Surely we are failing them by not teaching them to save?
There is no greater lesson than instilling a culture of saving. Saving teaches individuals the value of money. Saving allows a sense of appreciation to develop. Saving enables individuals to take control of their financial affairs. The best part is that this education is free and will see them through their lives as adults, but it must start somewhere.
Visiting a bank and opening a savings account best demonstrates the concept of saving. Make a deposit and your money earns interest and grows, safely and securely. Saving allows one to build a nest egg and gives access to funds when needed. Make a withdrawal and the capital amount decreases, as does the interest. Spending satisfies some need, but also leaves one with less cash in hand.
When I was saving for that bike, I was blinded by excitement and my only goal was to get it as fast as possible. I did not set time-related goals. I also did not understand that if I had put my money into a savings account with a bank, then this would have earned interest compounded over time; and that the interest rates offered by banks can vary a lot.
There are a range of savings products to choose from. Call accounts with a 32-day notice period, five-year policies and unit trusts can be considered for long-term goals, especially if you find it hard to commit to a regular savings plan. For the short-term, consider savings accounts and money-market funds because they give access to funds quickly in the event of any financial emergency. Whichever you decide on, remember always to shop around for the best interest rates. Today you can get anything from 2% up to 10% interest a year on a savings account.
It is important to choose a financial services provider that best suits your individual needs. Enquire about interest rates, access to your funds, investment periods, debit order deductions, lump sum amounts, and the fees, of course. Bear in mind that if it seems too good to be true, then it probably is, and stay clear of pyramid and other profit schemes that promise seemingly unbelievable returns.
Proper financial planning is vital and offers numerous benefits, so put time aside to consider the options. It is never too late to start saving. Take charge of your own financial affairs today, and never settle for the first quote you receive.
Yolandé van Rensburg is head of communication and public relations at Capitec Bank
How to clear your name
Q: I have been blacklisted. How do I get my name cleared?
A: Blacklisted is a term that is often used incorrectly. Every month all the credit grantors supply repayment information on all their accounts to the credit bureaus, which build up a payment history of your accounts. If you pay your accounts on time, this listing is positive, ensuring that it is easy to obtain credit when needed. If you are often in arrears the listing will have a negative influence on your credit behaviour and this is often referred to as ‘blacklisting”.
Other ‘blacklisted” negative information can be the result of a court process, such as judgements, administration orders or sequestration orders.
According to a credit grantor’s internal processes and policies, it hands clients over for, legal collection, writes off bad debt, revokes credit cards if the limit is abused, repossess goods bought and not paid for and so on. When a credit grantor takes any of these actions it is seen as negative behaviour and you will automatically be ‘blacklisted” to warn other credit providers that you are not honouring your debts.
The process of removing negative information from the credit bureaus is difficult and much depends on the credit grantor’s company policy. The following are guidelines that help to remove your name from a blacklist:
– Always settle your outstanding debt in full and get a settlement letter from the credit grantor. Request it to amend your account information with the credit bureaus. Although the account will now reflect a status of ‘settled” the repayment history is stored for five years and it might take time before an individual will be accepted for new credit as most credit grantors look at repayment history. But repayment of outstanding accounts will always be seen as positive.
– If a judgement was granted against you, settle the outstanding debt, take the settlement letter to the clerk of the court and state that you wish to apply for a rescission of the judgement. Take this form back to your creditor and request them to sign the Consent to Rescission forms. Ensure that you have a valid reason for the request. For example: ‘I have applied for a new position and my appointment depends on this application to remove my name from the blacklist.” Keep in mind that if a judgement was taken by default (meaning that you were not present in court when the judgement was given), you can request the rescission on this ground.
There are many so-called credit repair organisations that promise to clear your name, take your money and then fail to remove the negative information from the credit bureaus. Remember, these people are often not legally trained and most credit grantors and the credit bureaus operate within legislation.
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