Another year is ahead of us and, like its predecessor, 2008 is bound to be fast-paced and filled with challenges. Follow our guidelines to ensure that, at least financially, you are ready to tackle the new year.
Drawing up a budget
Reckless spending is dangerous and can lead to a cycle of debt and uncertainty. Sticking to a sound household budget is a responsible method to manage your monthly expenses. Discuss this budget with your family so they understand the need for it. Remember to bear large expenses in mind, such as the back-to-school items your child might need this year.
List all your sources of monthly income as well as all your household expenses.
Add up your monthly income: salary/wages, overtime and so on.
Add up your monthly expenses: rent/home loan, car payments, policies, school fees, groceries, clothing, petrol, medical bills, telephone, cellphone, water and electricity, bank charges and entertainment, and so on.
If your expenses exceed your income, you are in debt and need a plan to manage the problem. If you cannot do this alone, you might need to consult a financial adviser. If you spend according to your budget, you should not need additional funding to meet your monthly obligations. Just remember to live within your means. If you cannot afford something, you should reconsider whether you really need it.
Borrow responsibly
If you have to borrow money, choose a financial institution you can trust. The National Credit Act promotes responsible lending to ensure people do not become over-indebted. Consider whether you can afford the loan repayments. Are the interest rates reasonable? If not, you will end up with more debt. If you take out a loan to pay off your retail accounts to improve your cash flow, destroy your shop credit cards so that you are not tempted to buy on them again. If you have any outstanding debts, try to settle them as soon as possible. This will save you money in interest charges and ensure you maintain a good credit record.
ATM safety
ATMs attract criminals, so put your safety first and stay alert when using one. Never tell anyone your personal identification number (PIN). If possible, rather use a card than cash.
Pay with your card instead of cash: a low-cost debit card for shopping is a safer and more convenient alternative to cash – cashless transactions mean no extra trips to the bank, retailer or ATM. Banks such as Capitec Bank charge zero fees on debit-card purchases.
Protect your PIN: your bank card can be used only with the correct PIN code. Never keep your PIN on a piece of paper with your bank card because anyone can use it if your wallet is lost or stolen. Rather memorise your PIN – it is much safer.
Be alert when entering your PIN: make sure nobody is watching you when you enter your PIN at the ATM or point-of-sale machine. Stand close to the machine and enter your PIN while covering the keypad with your other hand. Make sure nothing looks suspicious at the ATM – there are cases where criminals have installed tiny cameras above ATM machines, enabling them to see your PIN code.
Watch out for card skimming: criminals use card-skimming devices to scan the information on your bank card’s magnetic strip, which enables them to make a duplicate bank card. Your PIN can be obtained using secret cameras or binoculars and, once criminals have it, they can do a transaction on your account using this duplicate card. Skimmers can be portable devices, or they can be connected to card readers, or even placed over ATM card slots.
Report anything suspicious: alert the bank, security staff or the police if you see any suspicious people loitering near an ATM or bank. If you feel unsafe, trust your instincts and leave. If your bank statement is incorrect, contact your bank immediately – someone could be accessing your account.
Report lost or stolen cards: contact you bank immediately if your card is lost or stolen to prevent criminals from accessing your account.
Yolande van Rensburg is head of communication and public relations at Capitec Bank