use credit wiselyimprove your life and realise your dreams

contents

02 Signs you may have credit issues

Spot the 5 signs of bad credit and take control of your money again.

03 What to ask before buying a car

Asking the right questions can get you the best deal.

09 Budget planner and guide

Plan your budget and work out how much credit you can afford.

05Invest in your future

Ways to pay, and save for education.

07High-impact home improvements

Add value to your home with these high-impact ideas.

Money Management | 2

5 signs of bad credit smart ways to recoverCredit is a great way of helping you get ahead. For example, consider how a loan used to buy a car can improve your life – it gets you to work, gives you freedom, saves you time. But if you don’t manage credit correctly and keep it under control, it can have a negative effect on your life.

take control

change your liferead the full storybit.ly/creditissues

You use too much of your income to pay off debt

You can’t keep track of how much you owe

You borrow money to pay off debt

You ignore letters or requests from your creditors

You hide your debt from family

budgeting tool Get started to find out how you should be splitting your monthly budget.bit.ly/capitecbudget

Follow these steps

Get a free copy of your credit report from www.mytransunion.co.za. Know what you spend your money on and always ask yourself if it is a need or a want. Use the budget planner and get a clear picture of your credit situation. Speak to your credit providers if you’re having difficulty making payments.

Prioritise paying off the debt with the highest interest.

Only take on debt that you can comfortably repay on time.

3 | Capitec Bank

what to ask before buying a carBuying a car never loses its thrill. It’s even more exciting if it’s your first. Consider some important issues before you hand over your money.

how will you pay? First work out what you can afford. Look at your budget to see how much you spend on car repayments. Monthly repayments aren’t the only costs to worry about.

Other costs:• Car insurance• Fuel• Licence fees• Maintenance costs

If you’re not paying cash you’ll need to get credit, which is offered by car dealerships and banks. Vehicle finance means that the car is only yours after your last repayment and it’s more difficult to get car finance on a vehicle older than 10 years.

If you choose a personal loan to pay for the car, it will be yours immediately.

Capitec Bank offers credit up to R200 000 over 84 months. The money is available immediately and you get free retrenchment and death cover.

new vs used Your budget will tell you whether buying new or used makes the most financial sense.

New cars are appealing because they’ve never been driven by anyone else, and you’re guaranteed a clean history. Buying used often means you can buy a better model or an upgrade of the new vehicle you were going to purchase, because the first owner took the biggest depreciation.

When buying secondhand, consumers can choose between buying from a dealer or privately. Both have their advantages. Buying from a reputable dealer offers the customer guarantees if something goes wrong, while buying privately can cut costs.

Be careful when buying online: always view the car during the day, try to take someone with you when you do and make sure the seller gives you the vehicle’s documentation before you hand over the money.

1. If buying from a dealer, is it reputable

and does it belong to the Motor

Industries Federation (MIF)?

2. Are there any warrantees and

guarantees still available on the car and

will this transfer on change of ownership?

3. Is it being sold for a fair price?

(Use the Internet to do some research)

4. Is there an authentic service history

available that can be verified?

5. Has the car been in any accidents?

6. Does the car have a low mileage?

7. Is the mileage on the odometer correct

and can it be verified?

8. Is there a mechanical report on the

car? (If not, consider doing one before

the transaction is concluded.)

9. Are there signs of oil leaks and rust?

10. Are there dashboard cracks?

(This could indicate that the car has been

standing in the sun, and might mean that

the other rubbers – such as window rubbers – are also damaged.)

used-car checklistHere are some of the key questions you need to ask:

Money Management | 4

ask the right questionsread the full storybit.ly/creditissues

credit calculator Choose the amount and term to work out how much credit you can afford.bit.ly/credittool

A good education is a great investment but it doesn’t come cheap. Here are 5 ways for you to pay for an education.

invest inyour futurestart today

Company trainingSome companies have training budgets for courses or skills that add value. Speak to your HR department to see if you qualify.

Part-time jobsCheck campus noticeboards and websites. Universities also offer work opportunities such as being a tutor or admin assistant.

Scholarship/BursaryScholarships cover up to 100% of your fees, but be ready to show why you’re the best candidate! Some companies and institutions offer bursaries. Candidates often have to work for the bursary provider after studying.

Personal loanIdeal for part-time students and those studying short courses. You choose how to use the money (e.g. fees, living costs). Capitec Bank offers credit plans up to R200 000.

Student loanSome banks offer loans to pay for tertiary studies which usually cover fees, accommodation, books and related equipment.

5 | Capitec Bank

Money Management | 6

student saving tipsStretch your rand with these 8 ideas

• Start early and put money into one of our 4 personalised Capitec Bank savings accounts, earning from 4.4% – 9% interest per year from the first rand

• Cut your bank costs with zero-fee card purchases by paying with your Global One card instead of with cash. Cash withdrawal fees are also much less at selected tills than at ATMs

• Set up a budget and plan how you’ll use your money. Student life can be expensive, so stick to your plan

• Before term starts, check out school or campus noticeboards and classified websites for used textbooks and other needed items

paying for educationread the full storybit.ly/edsave

savings calculator Identify what you’re saving for and how to reach your goals. Our savings calculator will get you started. bit.ly/capitecsave

• Buying stationery in bulk and from factory shops is often cheaper than from chain stores. Search for stationery factory shops online

• Form a support group with other parents. For example, set up a chat group where you can share news of sales and discounts

• Flash your student card for any discount you can get

• Make use of free WiFi on campus and at cafés to catch up with friends and family, and for doing research

7 | Capitec Bank

high-impact home improvements

improving your home is easyCapitec Bank offers credit up to R200 000 over 84 months. The money is available immediately and you get free retrenchment and debt cover.

If you’ve got:

• Spend some money on a garden clean up and trim• Invest in new scatter cushions for various rooms• Paint a feature wall behind a television or bed• Keep things tidy with baskets or wooden storage containers

R2 000

• Replace worn or dirty carpets, especially in high visibility areas

• Repaint or reupholster secondhand furniture• Bring the light into your home with a skylight• Spend money on accessories like pot plants and vases

R10 000

• Repaint kitchen cupboard doors, replace counter tops and door handles, and put up painted shelves

• Buy original art at end-of-year student exhibitions, markets or online art shops

• Replace bathroom basins and taps• Invest in a closed combustion fireplace

R20 000

Buying a home is the biggest investment most people will make. It needs lots of love, attention and money to make sure that it looks good, remains in a great condition and increases its value over time. Here are some high-impact makeover ideas for you to try.

R50 000• New skirtings and cornices make a huge impact• Replace old downlights and switches with new ones• Upgrade your security with electric beams, burglar

bars, electric fencing and maybe even cameras

R100 000• Paint the house, inside and out, including fascia

boards, gutters and downpipes• Retile bathrooms, add a modern glass shower, and

put in natural stone tops• A wooden deck or terrace is always a bonus

Money Management | 8

ideas for every budgetread the full storybit.ly/homefixes

credit calculator Choose the amount and term to work out how much credit you can afford.bit.ly/credittool

9 | Capitec Bank

Total income (A) R

LESS Total expenses (B) R

Surplus (disposable income)

R

This means you should think about saving or investing this extra money.

LESSTotal savings/ investments (C) R

Monthly income

Budget ActualYour income

Partner’s income

Part-time work

Commission

Total income (A)

Monthly expensesFixed expenses

Budget Actual

Home loan/Rent

Medical aid

Water

Electricity

Telephone/Cellphone

Bank costs

Internet/TV

Education policy

Insurance policy

Funeral policy

Credit/Store cards

Furniture

Education/School fees

Sport/Gym fees

General expenses Budget Actual

Groceries

Family support

Clothing

Medicine

Hair/Beauty

Kids’ pocket money

Entertainment

Restaurants/Takeaways

Cleaning service

Transport Budget Actual

Vehicle instalments

Fuel

Vehicle repairs

Taxi/Bus/Train fare

Total expenses (B)

Monthly savings/investmentsBudget Actual

Total savings/investments (C)

Total expenses (B) R

LESS Total income (A) R

Shortfall R

This means you should cut your expenses immediately and/or find extra work to increase your income.

• Yearly expenses: Make a list and spread the cost over 12 months. These expenses may include your TV licence, car licence and postbox hire

• • Replacement expenses and repair work: Plan

for these expenses by setting money aside each month for things that may need to be replaced or repaired some day, like your car or fridge

• • Investments: Aim to save 10% of your

salary each month. Consider interest-earning investments – they grow each month. Choosing an investment that you can name, like one of our savings plans, can help you stay disciplined

remember

planning your budgettake control of your money

Money Management | 10

1. Think ahead2. Understand your income3. Understand your expenses4. Cut unnecessary expenses5. Draw up your budget

how to budget

fixed expenses 3 200Home loan/Rent 2 000 Medical aid 500Debt repayment (bank) 300Debt repayment (retailer) 200Vehicle repayment 200

other expenses 3 700

Groceries 1 200 Transport 800Family support 500Water 250Electricity 250Bank costs 300Telephone/Cellphone 200Clothing 200

monthly expenses R6 900

monthly income R16 000net income (on salary slip) 10 000Your income (after deductions) 10 000

other income 6 000Partner’s income 3 000 Part-time work 1 000Commission 2 000

surplus R9 100

disposable income

Use your disposable income to invest in savings first before spending it on wants, which are luxuries or unnecessary expenses

notes

Become money smartSMS your name & email address to 30603 and receive more money management tips.

credit tips Determine your affordability: can you easily afford the monthly repayments of your loan? Determine what money you have available after all your expenses. Plan your budget and consider your commitment for the full term of a new loan. Always have extra money for unexpected expenses.

When choosing a credit provider: compare interest rates, admin fees and credit life insurance. Understand the full offer and ensure that there are no hidden costs – credit life insurance is the most common hidden cost

Match the loan term to your purchase: if you are paying for one years’ worth of education ensure you pay off the loan within a 1 year period.

Visit our Money management page to:

Crunch the numbers Utilise our on-line calculators to help you manage your money

Tips & News

capitecbank.co.za/money-management

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2858 Credit A5 Booklet