A little help with your financial planning

Good advice, good intentions and all the planning in the world cannot shield you from life’s happenings.

Unforeseen circumstances are what make life interesting, nerve-wracking and exciting.

It does mean, however, that best-laid plans sometimes go right out of the window and leave you scrambling to sort things out. This can be especially challenging when it comes to financial planning and budgeting.

A dollar can only be stretched so far and spent only once. During the present economic climate, realities are really hitting home at all levels. The private sector, government and people’s livelihoods and incomes are being put to the ultimate stress test.

In such economic times, where we are seeing people being retrenched, government is really trimming the fat and cutting budgets to the bone, and access to money and disposable income is harder to come by. However, bills still need to be paid; lives can’t be put on hold and children still need to be clothed, fed and educated.

All of these cost money. Borrowing money to plug gaps or simply to make ends meet is not a long-term solution, especially when it comes to recurring costs. It is also not a way to pay for things that are essential for development or for increasing career opportunities and prospects, like education or short courses.

Taking out a personal loan can be the right decision, as long as you take out a loan from a reputable organisation and always read the terms and conditions.

Borrowing money from friends or family puts a strain on even the best relationships and often ends in tears and resentment. Depending on what a loan is needed for, there are many options to choose from, however, there are only a few options that make sense and won’t cost you the world.

The first thing to know and realise is that it isn’t only banks that extend loans; large financial institutions such as Old Mutual are often able to extend a credit facility. Operating much like a bank, but potentially with lesser requirements such as collateral/security.

A personal loan can be part of a sound, long-term financial planning strategy. Especially if the loan is earmarked to pay for education, or an essential medical procedure or for vital repairs or upgrades to a home. Personal loans for frivolous expenditure should always be avoided and are definitely not part of sound financial planning.

A good financial provider would also advise you not to spend your money on a whim. Reputable lenders will always assist in finding a loan that fits the needs of the individual. Everyone’s financial needs are different. Therefore, personalising the loan and coming up with a feasible repayment structure is very important. This will prevent the lender from falling into arrears or digging a financial hole they can’t get out of.

This is where established financial institutions differ from payday lenders and short-term loan providers. Or even a ‘helpful’ acquaintance, willing to ‘assist’ you at a reasonable interest rate, which often turns out not to be so reasonable in the long run. Getting a personal loan from a financial institution that is tried, tested and registered with the Bank of Namibia (BoN) and the Namibia Financial Institutions Supervisory Authority (Namfisa) will not only alleviate your financial situation, it will also give you peace of mind.

Financial stress can put a huge strain on families, relationships and affect work performance. Therefore, as part of an overall solid long-term financial plan, do some research when you need a personal loan. With all the economic stress that is at present on everyone’s shoulders, unburden yourself and give yourself room to breathe.

Get the right advice and make a well-considered decision when it comes to taking out a loan, while at the same time not putting your life, education and family on hold.