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GPSSA highlights the impacts of ‘excess spending' A financial awareness session that can be found on the Jahiz platform

Abu Dhabi, 7th October 2024:  The 4th financial training session out of a series of nine awareness trainings entitled ‘Debts and Financial Difficulties’  is now available on Jahiz – Future Government Talents platform as part of the General Pension and Social Security Authority’s (GPSSA’s) transformational program Wafra,  an advanced system for proactive financial planning.

The awareness session sheds light on the impact of excess spending and debt repayment deficits, while offering ways by which individuals can avoid negative repercussions caused by debts.

Debts and negative repercussions

Debts have a negative impact on an entire family’s standard of living, resulting in isolating from relatives and friends due to not being able to afford life’s daily expenses. Debts impact the present and the future, limiting one’s ability to enjoy daily outings, plans and future investments.

Seek the best options

There are plenty of options that can help a person build healthier financial habits in order to avoid debt and manage mounting expenses. One option is to consolidate installments and settle the entire due amount in order to reduce monthly interest rates, while avoiding unnecessary expenses such as owning an expensive car or moving to a cheaper house, in a nut shell one must rationalize mandatory expenses and limit the ‘not so necessary’ ones.

Cash flow

Cash flow refers to income that is used to purchase more assets to pay off debts while generating additional income. The combination of income and assets creates wealth, which contributes to reducing debts and selling claims at high profits. Installments help generate profit and increases savings on the long term.

Overspending

Excess spending affects financial planning on the short and long run. It occurs when a person spends more than his/her income or budget, resulting in not having enough cash flow, thus having to borrow money, which evidently increases debt. These signs are evident when an individual is unable to cover daily expenses, pay off debts or borrowed funds and repeatedly exceeds the credit card, loan or overdraft limits by continuing to withdraw borrowed cash.

Reasons for accumulating debt

Debt is mainly accumulated due to a high cost of living, lack of financial planning, over spending, stagnant salary, high interest rates on credit cards and loans, as well as poor investment choices; factors that result in accumulating debt and burdening the entire family.

Debt management

Important and simple steps to manage debt are necessary when in this situation, starting with listing due payments and their dates, determining which debts should be addressed first, paying off debts by identifying their types and openly discuss the situation with the bank to reach an agreement to reschedule payments and repay due amounts. Meanwhile, one must work on increasing income and reducing cost of living by giving up unnecessary luxuries and selecting less expensive products.

How to do it

Opting for less expensive public service systems, setting a budget with debt amounts and arranging their repayment according to priority; developing a budget or plan for expenses when making the decision to spend money; reduce unnecessary expenses and monitor cash outflow. Jot down each expense made in order to prioritize spending and adopt smart habits when managing credit cards and loans; find cheaper alternatives when purchasing items/products and avoid selecting products with high interest rates.


Posted by : DubaiPRNetwork.com Editorial Team
Viewed 4248 times
PR Category : Local News and Government
Posted on : Monday, October 7, 2024  9:57:00 AM UAE local time (GMT+4)
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