Looking at your family’s financial situation in a holistic way helps you examine all aspects of it.
All the individual parts in a financial plan need a ‘clean bill of health’ for your ‘family finance machine’ to function optimally as a whole.
Debt is one of those ‘parts’ and something we all take on in some form.
Family financial audit
Many families are struggling to gauge how much debt they are saddled with and how to manage their way out of it. This is when doing a family credit audit is so helpful.
As a family, talk openly and honestly about who owes what to whom and, as a starting point, access your free credit report online. Sign up to Old Mutual Rewards and earn rewards points by accessing your annual credit report for free.
The credit report
A credit report is a document that’s compiled by credit bureaus and it provides information that creditors may use to help them decide if they want to extend credit to you.
It will include:
• Your personal information
• Your credit score
• All your past and present debt obligations
• Any defaults or court orders you have with creditors
• Any enquiries that creditors have made about you.
Once each family member has accessed their credit report, using all the information provided in it, make a list of all of your debt obligations, from the largest to the smallest.
Creating a financial plan
If you have spare money to settle your debt as a family, make sure you tackle the smallest loans with the highest interest charges first. That way you can start whittling down the bulk of your credit agreements.
Remember you can also enlist the help of a financial adviser to help with your family’s financial planning.
Visit us at www.oldmutual.co.za talk to a financial adviser today.
Old Mutual Life Assurance Company (SA) Limited is a licensed FSP and Life Insurer.