Increases in cost of living, as well as rising interest and inflation has had a major impact on the finances of many South Africans, leading to a rise in debt as they use credit as a way to make ends meet.
With October being Mental Health Awareness Month, people should be aware of the stress that financial problems can cause and its impact on mental health.
Charnel Collins, CEO of National Debt Advisors (NDA), said that financial troubles often result in anxiety and stress, which can have a negative impact on mental health or worsen an existing problem.
Collins said: “Being unable to support your family, honour your payment commitments or make ends meet will cause feelings of anxiety and panic.”
‘’Over-indebtedness does not only impact our ability to achieve financial security, but it also harms our mental state, taking a toll on our emotional well-being.”
Carla Oberholzer, DebtSafe’s spokesperson and debt advisor, said that stress related to finances or debt impacts the mental health of South African consumers and is not only an economic issue but can also impact the general health of a person.
“Debt counselling process can be the financial solution you require to take control of your debt and lessen the anxiety associated with being over-indebted,” Oberholzer said.
If you are unsure about debt counselling services, here is a breakdown:
1. A debt assessment before after applying, which will take a look at a consumer’s debt and analyse their financial situation.
2. A reckless lending investigation to make sure that the consumer understands the risks and financial responsibilities that are involved with a credit agreement.
3. A debt payment restructuring plan where the debt counsellor negotiates with credit providers on behalf of the consumer to find a payment plan that the consumer can handle.
4. A new monthly budget where the debt counsellor will help the consumer create a plan to manage their income and expenses.
5. Protection from asset repossession and against harassment from credit providers, which can worsen financial strain.
6. After-care on a monthly basis until the consumer is debt free.
Collins shares a few tips on how one can avoid or limit financial anxiety:
Budget
Writing down your income and expenses helps account for where you spend your money.
Saving
Not having savings in place results in having to take out a loan when there is an urgent need for money, often leading to stress.
Debt management
Paying off your debts in manageable monthly instalments and putting any extra money towards paying off those your debts. “Start with the smallest debt first and move on to the next,” said Oberholzer.
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