The festive season is the period in which we give and splash out on things long desired. This tradition is brought about by the availability of excess cash in the form of bonuses, saving groups and other investment schemes. With extra cash, people find that they are unable to resist the urge to go on a spending spree and, in the process, forget to service their debts.
Soon children need to go back to school and creditors come knocking and the situation turns from festive to sadness. Once more life becomes a tough cycle of balancing income and expenses and managing debts.
Credit Health, the leaders in personal credit information and the 3 in one credit report, advises people to not neglect their debt arrangements and to try and use the extra income to service their debts. “Most people fall into the trap of too much spending during the festive season. Granted it is the one time of the year where people look forward to spoiling themselves and their loved ones. Creditors are the least thought of in this season’s spending cycle. The trick though, is to include your debts in your festive budgeting” said Kamlan Moodley, Head of Credit Health.
“In fact, including your creditors in your planning will prove beneficial in the long run. Since there is excess cash you can even pay two or three instalments upfront and end up paying off creditors’ way ahead of schedule” said Moodley. “It is not easy but it is worthwhile. This is like that dash a runner makes in the middle of the race trying to move away from the pack and giving him/her some breathing space”.
Those who are not able to service their debts are normally caught in the dreaded game of cat and mouse once the festive season is over avoiding creditors during the dry month of January. Kamlan advises that this is the worst mistake people tend to make. “You don’t want to avoid you creditors. They are not simply going to forget about you. In fact rather get in touch with your creditor and discuss how you can make up for the time when you are not able to make payment. In most cases you find out that there is a minimum amount you and your creditor can agree upon. Avoiding your creditor’s call does not make the debt go away; it merely prolongs the collection process for you Furthermore, the costs of collecting the debt from you start to escalate in terms of sms, letter and phone costs every time a debt collector needs to contact you for non-payment. These costs can be reduced if payment is received on time or an adequate arrangement is made with you”.
Yes, it is the season to be jolly but servicing your debt can trim off a load of responsibility leaving you with a fat wallet and a credit healthy life.