By Eduan Kruger from Spaarwiel<\/p>\n\n\n\n
Spaarwiel is a podcast that discusses financial independence, personal finances, and savings and investment opportunities. This podcast is presented by Eduan Kruger, where he talks to regular people as well as experts about personal finances and financial independence.<\/p>\n\n\n\n
<\/p>\n\n\n\n
Categorise it and understand its impact<\/em><\/strong> <\/p>\n\n\n\n Categorise your debt:<\/em><\/strong> <\/p>\n\n\n\n Be aware of the impact of debt on your savings:<\/em><\/strong> <\/p>\n\n\n\n The impact of debt and tax:<\/em><\/strong> By Eduan Kruger from Spaarwiel Spaarwiel is a podcast that discusses financial independence, personal finances, and savings and investment opportunities….<\/p>\n","protected":false},"author":12,"featured_media":195157,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_seopress_robots_primary_cat":"","_seopress_titles_title":"","_seopress_titles_desc":"","_seopress_robots_index":"","_kad_blocks_custom_css":"","_kad_blocks_head_custom_js":"","_kad_blocks_body_custom_js":"","_kad_blocks_footer_custom_js":"","_kadence_starter_templates_imported_post":false,"_kad_post_transparent":"","_kad_post_title":"","_kad_post_layout":"","_kad_post_sidebar_id":"","_kad_post_content_style":"","_kad_post_vertical_padding":"","_kad_post_feature":"","_kad_post_feature_position":"","_kad_post_header":false,"_kad_post_footer":false,"_kad_post_classname":"","footnotes":""},"categories":[801,800],"tags":[426,429,42],"class_list":["post-195156","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-financial-and-migration-news","category-news","tag-afriforum","tag-afrikaans","tag-wereldwyd-en"],"taxonomy_info":{"category":[{"value":801,"label":"FINANCIAL AND MIGRATION NEWS"},{"value":800,"label":"News"}],"post_tag":[{"value":426,"label":"AfriForum"},{"value":429,"label":"afrikaans"},{"value":42,"label":"Wereldwyd"}]},"featured_image_src_large":["https:\/\/wereldwyd.co.za\/wp-content\/uploads\/2024\/10\/olieman.-unsplash-1024x683.jpg",1024,683,true],"author_info":{"display_name":"AfriForum","author_link":"https:\/\/wereldwyd.co.za\/en\/author\/wianviljoen\/"},"comment_info":0,"category_info":[{"term_id":801,"name":"FINANCIAL AND MIGRATION NEWS","slug":"financial-and-migration-news","term_group":0,"term_taxonomy_id":801,"taxonomy":"category","description":"","parent":800,"count":200,"filter":"raw","term_order":"0","cat_ID":801,"category_count":200,"category_description":"","cat_name":"FINANCIAL AND MIGRATION NEWS","category_nicename":"financial-and-migration-news","category_parent":800},{"term_id":800,"name":"News","slug":"news","term_group":0,"term_taxonomy_id":800,"taxonomy":"category","description":"","parent":0,"count":494,"filter":"raw","term_order":"0","cat_ID":800,"category_count":494,"category_description":"","cat_name":"News","category_nicename":"news","category_parent":0}],"tag_info":[{"term_id":426,"name":"AfriForum","slug":"afriforum","term_group":0,"term_taxonomy_id":426,"taxonomy":"post_tag","description":"","parent":0,"count":423,"filter":"raw","term_order":"0"},{"term_id":429,"name":"afrikaans","slug":"afrikaans","term_group":0,"term_taxonomy_id":429,"taxonomy":"post_tag","description":"","parent":0,"count":341,"filter":"raw","term_order":"0"},{"term_id":42,"name":"Wereldwyd","slug":"wereldwyd-en","term_group":0,"term_taxonomy_id":42,"taxonomy":"post_tag","description":"","parent":0,"count":222,"filter":"raw","term_order":"0"}],"jetpack_featured_media_url":"https:\/\/wereldwyd.co.za\/wp-content\/uploads\/2024\/10\/olieman.-unsplash.jpg","fimg_url":"https:\/\/wereldwyd.co.za\/wp-content\/uploads\/2024\/10\/olieman.-unsplash.jpg","_links":{"self":[{"href":"https:\/\/wereldwyd.co.za\/en\/wp-json\/wp\/v2\/posts\/195156","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/wereldwyd.co.za\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/wereldwyd.co.za\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/wereldwyd.co.za\/en\/wp-json\/wp\/v2\/users\/12"}],"replies":[{"embeddable":true,"href":"https:\/\/wereldwyd.co.za\/en\/wp-json\/wp\/v2\/comments?post=195156"}],"version-history":[{"count":0,"href":"https:\/\/wereldwyd.co.za\/en\/wp-json\/wp\/v2\/posts\/195156\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/wereldwyd.co.za\/en\/wp-json\/wp\/v2\/media\/195157"}],"wp:attachment":[{"href":"https:\/\/wereldwyd.co.za\/en\/wp-json\/wp\/v2\/media?parent=195156"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/wereldwyd.co.za\/en\/wp-json\/wp\/v2\/categories?post=195156"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/wereldwyd.co.za\/en\/wp-json\/wp\/v2\/tags?post=195156"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
Debt \u2026 Something nobody wants to have against their name. Yet it is something most of us cannot avoid in some or other stage of our life.
It is however important to distinguish between 1, bad debt (mostly associated with luxuries, and has high interest rates) and 2. \u201cbetter\u201d debt (debt that can be used to productively build your wealth). A home loan can for instance in many cases fall into this category.
Let\u2019s look at consumer debt. Consumer debt is basically debt that is made because we want to finance today\u2019s pleasure with tomorrow\u2019s earnings. As a result, we are then forced to pay yesterday\u2019s debt the day after tomorrow \u2026 Meaning that we make no progress with our personal finances \u2026 Does it make sense?
There are a few things we need to consider when it comes to debt, so we can limit the impact of consumer debt on our wallets, emotions, and time \u2013 and later avoid it.<\/p>\n\n\n\n
Debt is like a person with multiple personality disorder. It can take the form of a home loan, study loan, store account, credit card, vehicle financing, and even medical and\/or other debt. No matter how many categories we create for debt, the one thing they all have in common is the potential to place a spiritual, emotional, and financial burden on our lives.<\/p>\n\n\n\n
Debt does not make a positive contribution to your journey to financial freedom and the time you have available to achieve it. The more of your monthly income you have to use to pay off debt, the less you will have to save (income \u2013 expenses = potential savings percentage).<\/p>\n\n\n\n
Apart from the fact that debt reduces your percentage of savings, most debt does not have any tax benefits for you, because debt is paid with post-tax money.
If someone pays off their debt with their salary, they pay off their debt with money on which they have already been taxed. Where that same person \u2013 if they did not have any consumer debt \u2013 could rather have prioritised pre-tax money to make a bigger contribution to their retirement fund, which has an income tax benefit component in South Africa (and many other countries).
Therefore, debt is simply paid with your precious after-tax rands, and without any further tax benefits. It is just as well somebody simultaneously kicks you on your right as well as your left shin. Ouch \u2026<\/p>\n","protected":false},"excerpt":{"rendered":"