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IS THERE hidden wealth in your debt? Theuns Hanekom of Blue Oak Systems believes so. To help debt-ridden consumers find out if there is wealth in their unsecured debt, his company has just launched a unique online tool called RESET.
With over 8 million South Africans over-indebted and debt consolidation solutions failing, it seems a little hollow to talk about encouraging a savings habit.
But Hanekom believes that until we can show consumers how to unlock savings from debt, we cannot begin to develop a savings culture in South Africa.
He feels financial advisers are trained to operate on one side of the personal balance sheet only, whereas the problem and opportunity often sits on the debt side.
“Consumers are not aware that a monthly savings may exist in their current debt. However with RESET, the first online debt consolidation calculator, anyone may review their debt in the privacy and environment of their own convenience.”
Hanekom says with the average savings of R2 300 per month per consumer reviewed, everyone’s debt should be reviewed.
“We have thousands of highly qualified financial planners in South Africa all selling retirement, investment or life products, which is right.
“But if they looked at the debt side of their clients’ personal balance sheets, you’d find that they could potentially improve their clients’ personal cash flow and either increase savings or as a minimum, reduce the need for clients to borrow more,” he says.
The traditional thinking to consolidate debt through taking a maximum loan doesn’t always result in achieving maximum monthly savings, says Hanekom.
“The problem is that if you don’t enjoy a monthly cash flow improvement which makes a difference, sooner or later you’re going to be borrowing again until such time as you just cannot access any more loans.”
Hanekom says that before looking at blanket consolidation and raising optimal loans, the first option must be to find maximum savings by taking the minimum loan.
Using debt consolidation effectively, and earlier in the debt spiral, could eliminate the need to advance to debt mediation or debt arbitration.
“But first you have to determine if there is wealth in your debt. All you have to do is look at both sides of your balance sheet.”
Add your voice on the Debt Issue:
*Ask our experts
*Share a personal story
*Write a guest post
With over 8 million South Africans over-indebted and debt consolidation solutions failing, it seems a little hollow to talk about encouraging a savings habit.
But Hanekom believes that until we can show consumers how to unlock savings from debt, we cannot begin to develop a savings culture in South Africa.
He feels financial advisers are trained to operate on one side of the personal balance sheet only, whereas the problem and opportunity often sits on the debt side.
“Consumers are not aware that a monthly savings may exist in their current debt. However with RESET, the first online debt consolidation calculator, anyone may review their debt in the privacy and environment of their own convenience.”
Hanekom says with the average savings of R2 300 per month per consumer reviewed, everyone’s debt should be reviewed.
“We have thousands of highly qualified financial planners in South Africa all selling retirement, investment or life products, which is right.
“But if they looked at the debt side of their clients’ personal balance sheets, you’d find that they could potentially improve their clients’ personal cash flow and either increase savings or as a minimum, reduce the need for clients to borrow more,” he says.
The traditional thinking to consolidate debt through taking a maximum loan doesn’t always result in achieving maximum monthly savings, says Hanekom.
“The problem is that if you don’t enjoy a monthly cash flow improvement which makes a difference, sooner or later you’re going to be borrowing again until such time as you just cannot access any more loans.”
Hanekom says that before looking at blanket consolidation and raising optimal loans, the first option must be to find maximum savings by taking the minimum loan.
Using debt consolidation effectively, and earlier in the debt spiral, could eliminate the need to advance to debt mediation or debt arbitration.
“But first you have to determine if there is wealth in your debt. All you have to do is look at both sides of your balance sheet.”
Add your voice on the Debt Issue:
*Ask our experts
*Share a personal story
*Write a guest post
