The Credit Card is maxed out!

"There is definitely more month than money at the moment." - a reality that's hit more families in the past year than I think in the past 20 years! 

I had a chat with an old school friend of mine the other day and he was really battling to find a job. It's not like he's not qualified. He has a tertiary diploma. It's not like he has no experience. He has 7 years in the restaurant industry and 2 years in retail. He's a likable chap, speaks well and has a fair intellectual capacity. But he's sat at home for the last 5 months. He's CV was out there; he went for interviews. But nothing. This obviously put stress on his wife and his family. Financial stress is the major cause of divorce I've been told and I can see why. They've drained their savings, they've maxed they credit cards and they are in the financial poo.

And this story seems to be a similar story around middle class families in South Africa at the moment. Electricity has increased by 30% over the past 2 years; Fuel is at a record R11.95 a liter, food prices have soared, a basic 2 bedroom townhouse is rentable at around R4,300 a month while a bond on small 3 bedroom townhouse is at around R10,000. And all these increased living expenses have been happening while income increases have been around 5% - while some haven't had an increase in over 2 years. To put it bluntly: It's bloody tough out there! Living has resorted to surviving. Most middle income earners are living (buying food, fueling their cars, etc) on their credit cards from the 5th of each month. And some have even admitted that they've reached their credit limit on their credit cards and there's just no more money they can draw. It's sad. But it's fact.

South Africa's unemployment rate is sitting at 29.8% (It was 25% in 2009). That means only 70% of the country is working. And of that 70%, only 5% pay tax. That 5% has to carry 100% of the country's expenses. No wonder it's getting tougher. Less people are working and more people are becoming desperate - it's tough out there guys.

It's amazing how we sometimes believe that we're the only ones who are battling. The next door neighbors seem to have it altogether - the fancy car, DSTV, nice clothes, etc. "Why are WE struggling?" The truth is that more people are living off credit now than ever before. Families want to maintain their lifestyles during these tough financial times and so living off loans, credit cards and clothing accounts are a means to an end. Except, the dog will bite sooner or later. Don't kid yourself. That BMW is on HP at R8,000 a month - it belongs to the bank, the DSTV is more than likely being paid by credit card and the new Nike clothes were bought on account. We're all in the same boat; it's just others seem to live in denial while others realize the state they're in and are making huge efforts to cut back where they can. I, for one, switched my DSTV off a few months ago and we've had to eat more peanut butter sarmies for lunch and more instant noodles for supper than we ever have before. But that's life. We're weathering this storm the best we know how.

I think the smart way is to man up to your situation. Realize that it's not just you. Cut back where you can. Choose the must-have's over the want's and prioritize correctly. And for those who believe in God - trust Him for increase, trust Him for unusual blessings and trust Him for financial miracles. I know I did. And just the other day I was able to fill up my car with cash, bless another family with some cash and we had left over for some Chinese food.

Like most things in life. You have ups and you have downs. Don't give up and throw in the towel when the going gets tough. Stick at it, keep your integrity and trust the Lord. I do believe that better days are ahead.

Keep the faith :-)