Better planning will help you cope with interest rates anxiety

7/20/2016


Consumers, especially those that are servicing debt, will be hoping for yet another interest rates reprieve as the cost of living continues to weigh heavily on household income.

The anxiety that many consumers feel during every interest rates review is an indication that most people do not plan long-term when it comes to their finances, says Ester Ochse, Channel Head at FNB Advisory.

“At the moment, people seem to be grateful to make it to the next interest rates review without defaulting on their debt commitments - instead of making the most of these changes to improve their financial security by saving, investing or quickly paying-off debt to boost disposable income.

“Even though most consumers’ financial position might be constrained due to the tough times, it is not ideal for people to merely survive interest rates changes without taking advantage of its opportunities.”

Ochse says in most cases, small changes in lifestyle can lead to major financial opportunities for consumers who would like to save or invest for a rainy day. Adding that the economy is challenging for everyone but only those who make smart, long-term financial decisions will be able to rise above the challenge and secure a better financial future.

The plight of consumers was recently highlighted in the recent FNB/BER Consumer Confidence which revealed that consumer confidence levels remain depressed. According to the Index, this signals that consumers are very concerned about the outlook for the domestic economy and their household finances.

The findings were in the midst of Statistics South Africa’s revelation that the local economy continues to shed jobs, a consequence that could further reduce the disposable income across many households.

“Long-term thinking and planning will allow people to cope with the current economic challenges. Fluctuations in fuel and food prices are likely to continue keeping consumers on their toes,” says Ochse.

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