With all the doom and gloom going on, you and other South African consumers (like you the homeowner, you the credit facility user or, you – paying off a loan) can breathe a small sigh of relief thanks to the latest repo rate cut. Yes, you have been granted the perfect opportunity to be proactive with your money and savings. It’s GO TIME – the ideal chance to use the latest repo rate cut, of 100 basis points, to your saving advantage. Whether you lower your current debt pile, or tuck the saving amount away for your emergency fund – NOW is the time to not let the occasion pass you by.
Think about it – you and others are facing an unexpected crisis aka Covid-19 and feeling the financial pinch thereof. Government, various organisations and the South African Reserve Bank have put and continue to put relief measures in place to help you try and (financially) cope through this terrible storm. So, why not (if this applies to you) use the latest measure to help during this time of uncertainty?
If you are a homeowner (with a variable interest rate linked to changes in the prime interest rate), for example, you can save the extra cash and add it to your emergency fund. Or, if you are an already indebted consumer, you should try and lower your debt pile and not splurge the money on those panic-buy urges.
Hereby, a few things to consider to make the best of the latest repo rate cut opportunity:
- Add any money/savings that you can to your emergency fund – especially during this crisis time, you may need it sooner than you think.
- If you are currently a homeowner (and you have sufficient cash flow) why not add your repo rate cut savings to your home loan to lower your capital amount owed? This will reduce the future installment you will pay on your home loan.
- Or, if you want to be a bit more proactive, why not pay your savings towards your debt and lower the amount that you owe? You can start with your lowest installment (like a store card) or, your highest interest rated debt (like a credit card).
- If the above do not apply to you and you are in dire need of financial help (plus, you receive a form of income currently), get into contact with a registered Debt Counsellor to see if Debt Review/Counselling will be a viable solution to help fix your debt pile.
Now is not the time to slumber but rather be proactive with your finances and money. Be a savvy consumer and make your repo rate cut savings work for you, especially in the situation you, and others around the world are finding yourselves in.