Picture: Getty Images/Meeko Media
Household cash flow across South Africa is under severe strain, with nearly four in 10 citizens expecting to miss at least one bill or loan repayment, according to TransUnion’s latest Consumer Pulse Study.
The study reveals that 79% of consumers rank inflation among their top financial worries, while only 37% feel their income is keeping up with escalating costs.
Also see: How a financial adviser can help you achieve your financial goals
When household funds are stretched to the limit, finance expert Renier Botha from Blink Finance warns that the key is taking action before a missed debit order escalates into severe debt.
Start with the bills that keep your household functioning
When funds fall short, prioritise essential baseline survival before addressing secondary accounts.
“Start by protecting the essentials that keep the household running,” advises Botha.
Rent or bond payments, electricity, food, and work transportation should form the top tier of your budget. Securing these core living requirements first gives you a realistic view of remaining funds, preventing a situation where you simply pay whichever creditor demands attention first.
Contact lenders before the payment date
Proactive communication is essential if you anticipate falling short on a debt commitment. Instead of letting a debit order bounce, reach out to your credit provider as early as possible to discuss alternative payment terms.
Also see: How to stop relying on credit cards for everyday expenses
This proactive step aligns directly with guidance from South Africa’s National Credit Regulator (NCR), which advises struggling consumers to contact their credit providers immediately to negotiate manageable repayment arrangements. Addressing the issue early preserves crucial options before penalty fees kick in.
Don’t borrow simply to hide a recurring monthly shortfall
Taking out short-term credit for a single emergency is entirely different from relying on loans to get through every month.
“If you are repeatedly borrowing to pay another debt, buy groceries or get through to payday, that is a sign the problem is bigger than one bill,” Botha notes.
Taking on extra credit without a clear repayment plan merely pushes financial strain into the following month. The NCR similarly cautions consumers to borrow only out of absolute necessity and to contact lenders at the first sign of distress.
Check what can actually be paused or cut
Reviewing actual bank statements, rather than relying on memory, often reveals unnecessary spending leaks like app subscriptions or unused memberships.
While TransUnion reports that over 50% of consumers have cut back on discretionary spending and 28% have cancelled subscriptions, small cuts alone may not bridge a severe financial gap. Trimming R100 here and there helps, but you must remain realistic about whether minor cancellations can fix a much larger monthly deficit.
Get help if the numbers no longer work
When income cannot cover basic living costs and debt repayments even after trimming non-essentials, patching the deficit indefinitely is unviable.
If direct negotiations with credit providers fail to yield an affordable arrangement, the NCR advises consumers to consult a registered debt counsellor. Seeking professional intervention early prevents late fees, legal notices, and mounting interest from compounding an already stressful situation.
Also see: Everyday expenses you might be overspending on
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