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Other Articles from The Villager

Sure way of killing Debt in 2015

Mon, 15 December 2014 13:31
by Mr. T
Business

The Namibian economy has recovered from the global economic crisis. Growth of real gross domestic product (GDP) remained robust at 5.0% in 2012 despite the persistent global economic turbulence. It is estimated to have slowed down to 4.2% in 2013 owing to negative impacts from drought conditions and a weak global demand for mineral exports. Real GDP growth is projected to climb moderately to 4.3% in 2014, benefiting from the continued expansion of construction activities related to new projects such as the government’s launch of a massive housing project, the commencement of the expansion of the container terminal at Walvis Bay and large investment projects in mining.
The lack of an independent monetary tool has led to the active use of fiscal policy as a major countercyclical tool to sustain economic growth in the aftermath of the global economic crisis. The budget deficit for 2013/14 is estimated to be lower than expected on account of lower spending than budgeted, a recovery in the Southern African Customs Union (SACU) revenues and increased revenue collection associated with higher domestic economic growth and initiatives to improve the tax-administration regime. Nonetheless, for 2014/15, total expenditure is expected to expand to 42.6% of GDP from 38% of GDP in 2013/14, leaving the overall fiscal deficit at 5.5% of GDP. This will be larger than the deficit of 4.1% originally projected for 2014/15 in the 2013/14 budget.
Inflationary pressures eased in 2013. Year-on-year inflation slowed down to 4.4% in November 2013, but increased slightly to 4.9% in December. On an annual basis, the year closed at an estimated 5.8%, lower than the annual inflation of 6.5% for 2012. The declining trend in inflation is mainly due to decelerating costs of food, while transport inflation picked up in the second half of the year.
Key risks to medium-term growth include weak global demand for mineral exports that would result in lower export earnings, adverse weather-related shocks that would further weaken growth in agriculture, delays in construction projects, and lower SACU revenues due to the economic slowdown in South Africa. Namibia’s growth prospects continue to be clouded by the country’s massive challenges of poverty, high unemployment and inequality.
The emergence of global value chains (GVCs) is perceived as an opportunity for Namibia, especially in view of the country’s abundant natural resources. Although GVCs do not specifically form part of the government’s strategic considerations, the government is aware of the need to implement innovative measures to enable the country to make the most of its comparative and competitive advantages, including policies to reduce the high cost of doing business, removing various bottlenecks in infrastructure and investing in skills as part of a broader diversification strategy.
Debt, especially consumer debt, can be like an anchor that weighs you down. I personally remembered when I was receiving calls left right centre about monies I owned to banks. It’s an ever-present reminder of why you’re not able to do the things in life you’d like to do. Having dealt with this myself, I know how easy it can be to believe that it’s impossible to pay off debt. You begin to believe you can’t live without it. You begin to believe that everyone has debt and it’s no big deal that you do. As we approach a new year, our debt can cloud our perception and emotions about the future. If we let it, debt can either discolour our resolutions or fuel a desire to establish healthy financial habits in the year ahead.
For next year companies and individuals should try the following to kill debt.
1. Don’t Stay Isolated
When we’re in debt, it’s common to feel shame. We pull back and don’t share what we’re going through with others. If you want to kill your debt, you can’t stay isolated. Do not underestimate the power of a support system. Surround yourself with people you can lean on, and who will offer you encouragement.
2. Act Now
Each day you delay your debt repayment is one more day it has to grow. Do something, anything. Pick a debt and just start paying extra on it. If extra money is an issue, then find ways to bring in some extra income as every little bit will help you pay off your debt quicker.
3. Turn Your Attitude On Its Head
Before I began to pay off my debt I had a serious case of the “I deserve it” attitude. If I had a long day at work, dealt with a difficult client or was just plain unhappy, I would tell myself that I deserved to buy myself something. That’s one thing if it happens rarely, but it became a way of life. If you want to pay off debt next year, this attitude must be turned on its head. Instead, focus on what it will feel like to be debt free. This attitude shift can be a difficult one to make, but is one that’s vital if you want to move past the belief that debt is simply a way of life.
4. Track Everything
We’ve all heard it. Who wants to track their spending? The thing is that it works. I did it myself when I started killing my debt, and it’s how I discovered where my money was going. You can’t change what you don’t track. Tracking your spending means just that, you keep track of how you spend every cent. This might seem laborious or impossible, but it can be done. Find a way to do it that works for you and use that knowledge to empower your approach to personal finance. After a few months you’ll see what fat can be trimmed and will be able to throw even more money at debt repayment.
5. Get Disciplined
Discipline is the name of the game when it comes to paying off debt. Motivation and emotion are important, but they will only take you so far. When you are dealing with something as tiring and tedious as paying off debt, it can be difficult to motivate yourself day in and day out. This is where discipline comes in. Discipline allows you to go on auto pilot as it just becomes automatic. This can be done with saving, putting money toward your debt each week or month. This discipline helps keep you on track while paying off debt -- as opposed to giving into the feeling you may be dealing with at the given moment.
If you want to start killing your debt in the new year, remember that it can be done. If you’re diligent and get started, you can be that much closer to debt freedom sooner than you think.