Reading Time: 3 minutes

New Year, New You?

A lot of people take stock of their financial, emotional and health situation at the start of a new year. It provides a good psychological opportunity to set new goals and make a fresh start.

Thus the saying: New Year, New Me.

Home Owners & Rates Increases

Last year was a tough one. International events (and local ones) placed increased pressure on us all. If you are a home owner in particular then no doubt you felt the pressure that came with making bond repayments to the bank.

As interest rates have been going up and up during the past year you have probably been alarmed at how much this has impacted your monthly debt obligations.

Higher bond repayments have to come from somewhere and with few people receiving any increases these funds generally have to be taken from other critical areas.

How do most people deal with these increased repayments?

Since they are not miraculously getting in more money each month, most people begin to lean more heavily on their existing lines of credit to cover costs they may have been able to cover before. This means that slowly but surely credit card balances begin to climb even though people make the minimum repayments each month. Soon food and electricity are being paid for using credit.

The Ability To Save Disappears

For many homeowners, who have faced increased costs on their bonds as interest rates have gone up, the idea of actually saving any funds for any future need has become an impossibility. As has saving toward maintenance costs associated with owning a home. And preventative maintenance is important.

It is said that it is not unrealistic to set aside 10% of your total home value in order to properly maintain it each year. This may involve painting, repairing leaks or slowly repairing wear and tear on door hinges, light fittings or perhaps work that is needed in the garden or the exterior of your place.

What is now happening is that most people do not take preventative maintenance steps (since they cannot afford to) but rather wait until something goes terribly wrong.

Others simply allow the property to become more and more run down over time hoping for some sort of financial windfall in order to one day sort out those problems. Not having available funds prevents them from being proactive. And the longer many of these preventative measures are delayed the worse problems can be when they come to a head.

No wonder many property purchasers simply consider total renovations when acquiring a new property. Often this is necessary since the property was not well maintained.

More Rate Hikes Soon

Economists warn that more rate increases are coming in 2023. This will mean further increases in bond repayments which will further place these consumers under pressure as they have to shift additional needed funds into these repayments.

”Economists warn that more rate increases are coming in 2023′

If you are under financial pressure then you should consider going to talk to your local Debt Counsellor to see what you might do to better manage your existing debts. They may talk to you about options like debt consolidation or adjusting your budget or which of your credit providers may be willing o offer some debt relief.

They can also discuss options like debt review or if things are very extreme sequestration and how these work.

New Year, New You?

Regardless of what option or options for dealing with your debt is right for you, what is true is that there will be options.

Most of the time it is also true that all of these options are best explored before your debt situation gets worse. The longer you hesitate the more complicated it can be and longer it can take to fix your financial situation.

Investigate and take action sooner rather than later.

Perhaps this new year the new you can have less debt and not more?