It is Women’s Month 2018 and, what better way is there to celebrate your BFF than caring about her finances and current financial situation?

Talking about finances with your friend is not always easy, but it is necessary. You don’t have to know all the ins and outs – of course her financial situation is personal, BUT you can be her perfect encourager, pointing her finances in the right direction.

Carla Oberholzer, debt adviser at DebtSafe, says that you can ask your BFF four basic questions and provide her with helpful financial guidelines and tips.

Here are the four questions and recommendations that Carla endorses to help your friend take care of her finances:  

1st Question

Ask your friend: “Are you currently trying to get your own mini-economy going?” 

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Recommendations

  • Encourage your friend to stop focusing on the negative economic climate out there. Advise her to concentrate on her own financial situation.
  • She has to have a personal budget that works for her and she should track her spending leaks by inspecting her bank statements every second month.

2nd Question

Ask your friend: “What financial or budgeting tools are you presently using to suit your lifestyle?”

Recommendations

  • Tell your friend that there are various financial ‘tools’ available – from books and talks to recommended phone apps.
  • Reassure your friend that she can consider any tool that will work best for her lifestyle, and that she should give one or two a try for a couple of weeks. She won’t make her life a little easier until she tries a few out first.

3rd Question

Ask your friend: “Do you take care of and service all your credit agreements as expected and agreed upon?” 

Recommendations

  • Guide your friend to know that it is important to keep up with payments and that she should try and pay more than the minimum instalment. Anything is possible if she puts her mind to it, even a second stream of income.
  • Inform her that she should always try to do research before she signs any credit agreement or considers taking out credit. She should remember that she has a voice and should bear in mind that it’s always important to communicate or negotiate with her creditors since life is getting harder these days.

 4th Question

Ask your friend: “What does your debt situation look like on a scale from 1 (debt is under control) to 5 (being severely over-indebted)?”

Recommendations

  • Analyse your friend’s debt scale with her and let her decide what additional financial habits she can add to her lifestyle. This will indeed help her to get rid of her debt faster.
  • If her debt score is reflecting a concerning four (4) or five (5) on the scale, take a look at options together on how she can tackle her debt pile. The key is to not take on more debt to settle current debt, she needs to go and see a professional and rather try to consolidate all her debt into one payment.

Debt consolidation, through the debt review process, for example, is regulated and recommended by the National Credit Regulator (NCR). This process is used in worst case scenarios and basically your friend’s last resort getting out of extreme debt. Spare her the hassle and encourage her to trust a registered debt counsellor.